The ruling Democratic Party of South Korea has introduced a proposed 'Digital Asset Basic Act' that aims to establish a thorough legal framework for digital assets. This includes guidelines for issuance, trading, custody, and supervision. The proposal recognizes the growing importance of digital assets as a crucial link between the real economy and financial markets. It categorizes value-linked digital assets, such as those tied to fiat currencies or real-world assets, as requiring authorization from the issuer, reserve requirements, and redemption obligations.
The proposal seeks to create a foundation for South Korea to lead the global digital financial order and introduces licensing, registration, and reporting requirements for digital asset businesses, including trading, brokerage, and advisory services. It also outlines rules on disclosures, internal controls, and market conduct, prohibiting unfair trading practices. The creation of a digital asset committee is proposed to review and coordinate policy, along with national plans for the sector.
This move follows the introduction of new rules by the Financial Services Commission and Financial Supervisory Service, aiming to combat voice phishing scams by implementing a strict system for delaying withdrawals across domestic cryptocurrency exchanges.