South Korea’s Financial Services Commission said it will move quickly to submit the government bill for the second phase of the Digital Asset Basic Act, while coordinating the release of guidance for corporate crypto trading with the legislative timetable. The regulator also plans to place digital asset custody under a standalone regulatory framework rather than simply treating it as an extension of exchange operations. On a closely watched issue in the local market, the FSC took a cautious line on forcing exchanges to separate their custody businesses. It said there are currently few overseas cases of mandatory structural separation and indicated it would rather address conflicts of interest through conduct rules than require exchanges to spin custody off into independently operated entities. In addition, South Korea said it will look to the European Union’s approach in creating a more accessible entry path for traditional financial institutions seeking virtual asset service provider licenses.
South Korea’s Financial Services Commission said it will quickly submit the government bill for the second phase of the Digital Asset Basic Act and align the release of guidance for corporate cryptocurrency trading with the pace of that legislation.
The FSC also said it plans to regulate digital asset custody as a standalone line of business. On the question of whether exchanges should be required to separate custody from their core operations, the regulator took a cautious stance on mandatory divestment.
According to the FSC, there are currently few overseas examples of forced separation in this area. The commission said it prefers to prevent conflicts of interest by tightening conduct regulation rather than requiring exchanges to run custody through fully independent operations.
South Korea will also refer to the European Union’s approach to provide a more convenient access mechanism for traditional financial institutions applying for virtual asset service provider licenses.
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