South Korea weighs new targets for Blockchain platforms

South Korea’s ruling party is reportedly considering new measures in the spirit of consumer protection following recent market turbulence that has shaken confidence and raised fears of an impending large-scale crypto infection.

People Power Party (PPP) Chief Politician Rep. Sung Il-jong said on Monday that his party was considering introducing “blockchain-based platforms” legislation, without revealing exactly what was planned, to better protect investors.

The minister expressed the government’s intentions during a consultation meeting between the party and the government on digital values ​​on Monday.

Sung alluded to parts of the special law on financial transactions, which seeks to regulate money laundering and terrorist financing, but said the law was not organized to deal with crypto specifically, Yonhap News reported.

PPP and its Integrated Financial Supervision Service (FSS), which supervises financial institutions under the direct supervision of the Financial Services Commission, will also start establishing a self-regulatory regime.

Five of the country’s best exchanges – Upbit, Korbit, Bithumb, Coinone and Gopax – raised their hands during the meeting to launch a joint advisory body that will monitor compliance with new and existing rules.

The possibility of new measures comes on the heels of TerraUSD’s collapse that triggered shock waves across digital asset sectors in May when fears gripped the crypto market and prompted regulators to act.

The ruling party’s assessment also comes when cryptocurrency lender Celsius announced it would suspend withdrawals and transfers from its platform, citing “extreme market conditions.”

“Concerns about Celsius’ solvency have peaked and the platform has reacted by suspending withdrawals,” Bybit chief technology officer Nathan Thompson told Blockworks on Monday. “This is a defensive move by the company. However, users who do not have access to their money are understandably upset.”

In both cases, fears of a spillover to certain sectors of crypto – including decentralized finance (DeFi) and stack coins – put further pressure on the sales side in an already besieged environment.

Bitcoin’s price, which usually acts as a barometer of market health, continues to fall, after falling 47% since May 5 from around $ 40,000 when the mumble over Terra’s demise began to melt.

Crypto prices are now at their lowest level since December 2020, with investors eating losses and preparing for a potentially long bear market. Bitcoin was last seen swapping hands for $ 21,500 and is down around 35% over a seven-day period, exchange data show.

With a newly elected government, South Korea has set out to reform many of its existing fiscal and economic policies, including its approach to digital assets. It is under these market conditions, as well as election promises, that South Korea’s PPP and FFS have justified a further tightening of the regulations.

If the crypto market is to experience any “responsible growth”, the establishment of supervision and a regulatory system is important, FFS CEO Lee Bok-hyun said on Monday.

But given the complex and unpredictable nature of cryptos, the establishment of a self-regulatory regime through the participation of “private experts” must also be considered, Lee added.

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