Bank of Korea Granted Right to Investigate Local Crypto Firms: Report
South Korea’s central bank has given the go-ahead to increase scrutiny of cryptocurrency service operators and issuers amid further discussions about virtual asset legislation in the country.
On April 20, local media The Korea Herald reported that the Bank of Korea (BoK) will be given the right to investigate operators of cryptocurrency-related businesses.
South Korea’s central bank has been competing with the country’s financial regulator, the Financial Services Commission (FSC), over crypto jurisdiction. However, the FSC will have the final say in the regulation of the digital asset sector.
The Bank of Korea expressed concern over financial stability risks from stablecoins and will now be able to request transaction data from crypto exchanges.
The BoK’s right to request data from digital currency operators was confirmed by an official from the National Assembly’s political committee last week. The FSC will express its official position at a subcommittee meeting on 25 April.
The meeting will speed up the rollout of South Korea’s laws on virtual assets, according to the report.
Democratic Party lawmaker Kim Han-gyu, who proposed the country’s crypto regulations, the Crypto Assets Act, said “The Financial Services Commission admits that it is necessary for the Bank of Korea to have the right to request data, but it refuses to include it in the bill. ”
The South Korean government has tried to push crypto legislation, but there have been arguments between the central bank and the FSC over who should control it.
However, the FSC warned that if the central bank governs crypto, it will send the message that digital assets have the same status as traditional finance. The FSC leader has previously said that he does not consider crypto a financial asset.
The two institutions have been in conflict for the past three years over crypto regulations. The FSC has been accused by officials of the Political Affairs Committee, a division of the country’s State Affairs Commission, of trying to monopolize its position as crypto regulator.
The latest development means that both South Korea’s central bank and its financial regulator will be able to investigate crypto operators and have full access to transaction data.
Related: South Korea saw over $4 billion in unregistered crypto transactions in 2022
The FSC has recently been active with enforcement actions against crypto companies and takes the same position as the United States Securities and Exchange Commission (SEC) in that it assesses securities in crypto assets.
South Korea’s Financial Supervisory Service, which operates under the FSC, announced an investigative body called the Digital Assets Committee in mid-2022.
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