On Wednesday, South Korea's ruling Democratic Party unveiled a proposal for the 'Digital Asset Basic Act', which aims to establish a legal framework for digital assets. This includes guidelines for issuance, trading, custody, and supervision. The proposal emphasizes that digital assets are becoming 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 issuer authorization, refund reserves, and redemption obligations. The proposal seeks to 'establish a foundation for Korea to lead the global digital financial order' by introducing licensing, registration, and reporting requirements for digital asset businesses. This includes trading, brokerage, custody, and advisory services. Additionally, it outlines rules on disclosures, internal controls, and market conduct, prohibiting unfair trading practices like market manipulation.
A digital asset committee would be created to review and coordinate policy, along with national basic and implementation plans for the sector. The current system is focused on investor protection but lacks a comprehensive framework for issuance, disclosure, and market structure.
This proposal follows the introduction of new rules by the Financial Services Commission and Financial Supervisory Service, mandating all domestic cryptocurrency exchanges to adopt a unified system for delaying withdrawals to combat voice phishing scams.