Bank of Korea to be given the right to investigate crypto businesses

by James · April 24, 2023

The Bank of Korea is likely to be given the right to scrutinize crypto businesses. This comes at a time when regulators in the country are debating crypto laws. A recent report by The Korea Herald pointed out that the central bank of South Korea has been competing with the Financial Services Commission [FSC] on the jurisdictional front for crypto and virtual assets. It stated,

“While discussions on virtual asset-related laws are currently ongoing in the National Assembly, it appears that the Bank of Korea, Korea’s central bank, will be given the right to investigate virtual asset operators.“

Also read – Terra: Kwon could be sentenced to 100+ years in the US, 40 years in Korea

BoK’s request to be accepted?

The Bank of Korea recently revealed its concerns regarding stablecoin and financial stability risks. An official from the National Assembly’s political committee confirmed last week that the BoK’s right to request data from crypto exchanges was upheld. This means that the central bank will be able to request transaction data from digital currency operators. However, the FSC will reveal its official position during a subcommittee meeting tomorrow. According to the report,

“The Financial Services Commission plans to officially express this position at the first subcommittee on the bill to be held on the 25th.”

Democratic Party lawmaker Kim Han-gyu who proposed the Crypto Assets Act in the bill’s first subcommittee said:

“The Financial Services Commission recognizes 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.

This probably means that both the central bank and the Norwegian Financial Supervisory Authority will be able to investigate crypto exchanges and other operators and have full access to transaction data. The FSC has taken enforcement action against crypto companies. It recently ordered five domestic virtual asset exchanges to abolish security tokens. Soon after that, it also published related guidelines. The same affected which security tokens would qualify for regulation under South Korea’s capital markets laws.

Also read: Holding Bitcoin has been profitable 89% of the time

What drives Korean Bitcoin investors?

Korean investors have been making a lot of noise in the crypto markets lately. In fact, XRP went on to win several records towards the end of March because of them. In parallel, Bitcoin was also traded at a premium.

Now it seems that the hype is cooling down. As shown below, the Korea Premium Index has been on a downward trend in recent weeks. Currently, Bitcoin is trading at a limit premium. In fact, on a couple of occasions between April 10 and 18, BTC was priced at a discount in Korea, highlighting the waning interest of retail investors.