The government announced Thursday that it had appointed Koh Seung-bom as the new chair of the Financial Services Commission (FSC) and Jung Eun-bo as the new head of the Financial Supervisory Service (FSS).
The move provides new leadership to South Korea’s two most important financial watchdogs.
Both men previously held important positions in the Korean financial industry. Most notably, Koh served as a member of the Financial Services Commission and the Monetary Policy Committee of the Bank of Korea.
According to Coindesk Korea, some observers speculate that the resignation of the previous chair of the FSC, Eun Seong-soo, was connected with controversial remarks he made about cryptocurrency at the National Assembly in April. Ruling party lawmakers had criticized him for saying that the government “cannot protect everyone who invests in virtual assets” and that cryptocurrency “cannot be recognized as currency.”
A Cheong Wa Dae official said he believed Eun tendered his resignation himself without prompting from the presidential office.. That hasn’t stopped speculation that Eun was ditched to attract younger, more crypto-friendly voters ahead of the coming presidential election.
On the other hand, some people worry that the appointment of Jung — a career bureaucrat — could hinder reform in the financial sector.
What does this mean for the future of crypto?
The biggest current policy issue in the crypto space is the revised Financial Transactions Act, which requires virtual asset service providers to obtain information security management system authentication (ISMS) certification and real-name bank accounts to register with the financial authorities.
September 24 is the deadline to register, and the FSC recently ruled out an additional grace period after the deadline. Only four exchanges so far have secured real-name bank accounts: Upbit, Bithumb, Coinone and Korbit. This means most of South Korea’s 60 cryptocurrency exchanges could soon be forced to close.
Still, attention is now focusing on whether the new financial leadership will change course. Korean-language blockchain news website TokenPost quotes an opposition party lawmaker as saying, “The authorities must end their ‘social distancing’ with virtual assets… You can’t expect proper results from an approach in which the supervisory authorities shift responsibility to the private sector.”
