As a direct response to what it has dubbed the “terra (LUNA) incident”, The South Korean government is taking steps to launch a new regulatory body to police the crypto sector, and could fast-track its creation.
The body, to be named the Digital Assets Committee, will be launched “as early as next month”, reported by Newspim in an exclusive article.
The committee will operate separately from the existing Financial Services Committee (FSC) and the Financial Supervisory Service (FSS), the country’s two top (tradfi) financial regulators. The FSC and its Financial Intelligence Unit (FIU) currently oversees the sector. The FSC deals with the sector in general and helps form policy, while the FIU regulates crypto exchanges.
The new committee would likely be one of the first dedicated crypto regulatory bodies in the world, and will take sole responsibility of controlling the sector – although the handover of power from the FSC and FIU may be done in a phased manner.
The media report, quoting sources from the People’s Power Party, the party’s President Yoon Suk-yeol, explained that the body “is expected to become a control center for policy creation and the supervision of the crypto asset industry.”
Among the committee’s tasks will be focus on the creation of the so-called Digital Assets Framework Act. This draft law, which is still in its formative stages, is Yoon’s idea, and will likely contain a large set of crypto-specific regulations, as well as a number of pro-crypto business measures.
The Digital Assets Committee would be launched immediately once Yoon had appointed a new Chair of the FSC, stated by an official from the party.
The media outlet added that the party had “decided to launch the Digital Assets Committee hastily” as a result of the LUNA incident.
By “unifying the system of the departments currently in charge of the sector”, the party says that it hopes the body will help “minimize market confusion and enhance policy effectiveness”
With the committee’s launch, it will bring some positive news for the sector with the party suggesting that “the schedule for legalizing initial coin offerings (ICOs)” could be accelerated.