South Korea’s federal government recommends the domestic crypto industry adopt a licensing system for exchanges and token issuers as a way of shielding investors.
A report issued by the Financial Services Commission to the National Assembly, the country’s legislature, also calls for new regulations to mitigate insider trading and pump-and-dump schemes.
The new regulations would be stricter, and the penalties for failure to comply would be stricter than those in the Capital Markets Act that the domestic crypto industry currently abides by.
The Comparative Analysis of the Virtual Property Industry Act reveals a recommendation to establish a licensing system that would relate to coin issuers such as companies that operate initial coin offerings and crypto exchanges.
Regulating coin issuers through a robust licensing system is considered to be the most immediately required protection in the market today. That position may be highlighted by the unfortunate market crash sparked by the fall of the Terra project, whose South Korean founder Do Kwon may find himself called before the National Assembly to explain what happened.
