Just a few days ago, we covered the Presidential Committee’s recommendation to the government to systemize cryptocurrencies.
Now, South Korea’s chief financial watchdog is urging lawmakers to quickly pass legal revisions to bring cryptocurrency into the institutional fold.
Korean-language blockchain news site The BChain reported on Thursday that Sohn Byungdoo, the Vice Chairman of the Financial Services Commission (FSC), attended a subcommittee meeting of the National Assembly’s National Policy Committee on Oct. 24.
During the session, he asked legislators to pass revisions to the “Act on Reporting and Using Specified Financial Transaction Information,” a.k.a. The Financial Transactions Reporting Act (FTRA), a law that imposes anti-money laundering obligations on financial institutions.
The revisions would legally define cryptocurrency, create safety mechanisms to prevent money laundering and protect investors, and license and register cryptocurrency exchanges.
Sohn’s plea to lawmakers marks a significant departure from the FSC’s previous “hands-off” attitude towards all things crypto.
According to the transcript of the meeting, Sohn told lawmakers that when the FAFT carried out its mutual evaluation of Korea in July, it didn’t really look at the country’s money-laundering safeguards on digital assets since it was before the task force’s guidelines on digital assets were released.
He pointed out, however, that in its currently ongoing mutual evaluation of Japan, the FAFT is properly examining how Tokyo prevents money laundering with digital assets.
He warned that the results of Korea’s evaluation will come out sometime between February and April, and since whether or not they passed the revisions would be an important factor in those results, it was urgent that lawmakers act.
According to The BChain, experts say that the FAFT could conduct follow-up evaluations to see whether their guidelines are being implemented.
Don’t get too excited yet..
Though the FSC wants lawmakers to pass the FTRA revisions by February, it remains very much to be seen whether they actually do.
And according to the Korean-language edition of CoinTelegraph, there may be very good reasons for legislators to hesitate.
In particular, opposition lawmakers and some legal experts note that the proposed FTRA revisions go beyond what the FATF guidelines suggest to include things such as mandatory information security management system (ISMS) certification and the issuing of real name bank accounts.
The main opposition Liberty Korea Party regards those additional obligations as “poison articles” that heighten barriers to entering the cryptocurrency market.
They also worry that the revisions still leave the government and regulatory bodies such as the Financial Intelligence Unit too much discretion to enforce what are in essence “shadow regulations” that could cause greater uncertainty in the cryptocurrency market and the wider industry.