A South Korean regulator has renewed calls for greater oversight of the crypto sector, but an industry association has warned that billions of dollars in damages could follow if only crypto exchanges are allowed to go bust.
According to Seoul Finance, the new chairman of the Financial Services Commission (FSC), Koh Seung-beom, announced that he would seek to”strengthen the monitoring of crypto exchanges” to ensure that they return customer deposits on time and follow other regulatory protocols.
Koh spoke to reporters after meeting with the heads of eight political and financial institutions in Seoul, where he discussed crypto and other matters.
Koh was quoted as saying:
“The Financial Intelligence Unit [a regulator responding to the FSC’s cryptoasset-related workforce] has been increased and a cryptoasset inspection department has been established. We will check with the FIU if we are on the right track.”
But the industry is doing what it can to fight back against regulatory policies that have closed all but four South Korean crypto exchanges in recent days or limited their services to pure crypto operations. News1 quoted the head of the Korea Blockchain Enterprise Promotion Association as calling on politicians to support a private member’s bill in parliament that would seek to repeal current regulations and open the door for crypto exchanges that do not have bank affiliation to offer fiat token trading.
The association was quoted as saying that the government and regulators had ignored the will of the “National Assembly, industry experts and the media” and allowed only “large companies” to offer crypto exchange services.
It added that it was a “bitter pill for the “39 mid-sized exchanges that had also invested billions of JPY to build various systems and get information security management system certification” – only to learn that they had to switch to crypto-only business.
Trading numbers have shrunk on most non-big Four exchanges in the days following last week’s regulatory deadline.
The cessation of these exchanges could endanger the holdings of client funds worth up to USD 8.4Billion, the association warned.
Meanwhile, Japanese regulators on the other side of the sea in the east have been asked to limit or monitor peer-to-peer crypto transactions (P2P).
According to Nikkei, legal experts have claimed that “direct [crypto] transactions between individuals have become a hotbed of crime.”
The media company noted that the Regulatory Financial Services Agency monitors transactions “through exchanges, but mainstream interpersonal transactions are not monitored. Experts called for “deterrence” of crypto fraud, adding that joint “public-private sector cooperation” is needed to create, improve and disseminate the “technical capabilities of tracking software.”