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News Regulation

New chief of South Korea’s FSS hints at relaxed crypto rules

Yoon Suk-heun, the newly appointed governor of South Korea’s Financial Supervisory Service (FSS), seems to support a relaxed approach to cypto industry regulation.

Speaking at the press conference after his approval to the post, Yoon stressed his desire to cooperate with other financial authorities in the country to create a solid regulatory framework beneficial to the crypto area and the financial system as a whole. The new FSS head told reporters:

«The FSS will collaborate with the FSC (Financial Services Commission) when an inspection on policies and financial institutions has different configurations associated with different scopes. FSC inspects policies, while the FSS examines and supervises financial institutions but with the oversight of the FSC».

Yoon Suk-heun refused to elaborate on specific policies the FSS may apply to domestic cryptocurrency exchanges, saying only that the agency will gradually review and address the existing issues in the industry.

The new head of FSS is known as an activist and reformist and is likely to avoid restrictive or aggressive measures. He will officially assume his duties tomorrow, on May 8, taking charge of the agency that operates under the umbrella of the FSC and is responsible for supervising financial institutions.

In December, the FSC announced its intention to ban anonymous domestic trading, obligating cryptocurrency platforms to check the identities of traders, what means that retail investors have to open real bank accounts instead of virtual ones to continue trading.

South Korean 4 major crypto exchange operators – which include Bithumb, Upbit, Coinone, and Korbit – fulfilled the requirement and transferred virtual accounts to real name-based ones, paying the price in drastically reduced trading volumes. Lee Jeong-ah, vice president of Bithumb said:

«The daily transactions of cryptocurrencies plummeted to around 400 billion won from 4 trillion won before the financial regulators implement the new regulation».

Lee also said that local banks were reluctant to accept new cryptocurrency traders. An Upbit official added:

«We don’t oppose regulations. But you can’t entirely kill the markets by simply imposing regulations. What the new FSS chief should think about is how the regulators should provide remedies to help crypto trading and blockchain technology get better».

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