"Rules on virtual-asset disclosure and business conduct to be upgraded to capital-markets standards…will valuation and advisory services be institutionalized as well?"

A research report commissioned to support the second phase of legislation for the Digital Asset Basic Act is said to include measures to raise virtual-asset (cryptocurrency) disclosure to the level of electronic disclosure, and to separate valuation, advisory and disclosure functions into distinct business categories.

According to the industry on the 23rd, the final policy-design report commissioned by the Financial Services Commission from Seoul National University’s Financial Law Center as part of preparations for the second phase of legislation reportedly calls for classifying virtual-asset valuation, advisory and disclosure services as separate sectors and applying a regulatory framework on par with capital markets.

At the core are three elements: separating valuation, advisory and disclosure functions into independent sectors; strengthening business-conduct rules to protect investors; and integrating the disclosure framework.

In particular, the report proposed unifying virtual-asset disclosures into a single system similar to the electronic disclosure system (DART). It also noted the need to standardize disclosure criteria and timing, and to clarify benchmarks for determining unfair trading.

It also included the need to regulate quasi-advisory activities such as investment advisory services and “leading chat rooms.” Tailored advice would be managed under a registration regime, while investment solicitations aimed at an unspecified public would be restricted, according to the report.

The report, however, serves as reference material outlining initial policy directions for the second phase of legislation, and whether and how it will be reflected will be decided in the legislative process ahead.