Authorities launch a ‘crypto-asset internal controls TF’… sweeping rethink of self-regulation

Authorities are set to launch a task force (TF) to tighten regulation of the crypto-asset market.

An emergency response team comprising the Financial Services Commission, the Korea Financial Intelligence Unit (KoFIU), the Financial Supervisory Service, and the Digital Asset eXchange Alliance (DAXA) said on the 11th that it has established an “Internal Controls Advancement TF” to strengthen system stability in the crypto-asset industry.

The TF was formed in the wake of Bithumb’s recent erroneous payout incident. An official from the emergency response team said, “This incident has led us to share the view that a comprehensive review of internal control systems across all crypto exchanges is necessary,” adding, “We plan to devise measures to upgrade self-regulation and strengthen its enforceability.”

Specifically, the TF is reviewing: ▲a full-scale overhaul of DAXA’s self-regulatory rules ▲identification of remedial items to prevent a recurrence and advance systems ▲an assessment of ways to enhance the effectiveness of existing internal controls and self-regulation ▲codifying revised self-regulatory measures into internal rules for each operator.

Kim Jae-jin, executive vice chairman of DAXA, said, “We take seriously the concerns raised by this incident,” adding, “I am confident that the industry’s strong commitment to self-policing will lead to the establishment of enhanced internal control processes that can respond swiftly to unexpected situations and prevent recurrence.”