South Korean Regulators Cautious on Crypto Deregulation, Say Nothing Decided

South Korea's financial and foreign-exchange authorities are taking a cautious stance on easing virtual-asset regulations as the Ministry of SMEs and Startups reviews possible policy changes.

Edaily reported on June 22 that the Financial Services Commission, the Ministry of Economy and Finance and the Bank of Korea view deregulation requests raised at a recent industry meeting hosted by the SMEs ministry as difficult to pursue immediately.

At the meeting, industry participants called for looser entry rules for overseas virtual-asset transfer businesses, eased registration requirements for crypto-based remittance and foreign-exchange operators, improvements to rules governing overseas remittances and investment, and early passage of the Digital Asset Basic Act.

The Financial Services Commission said nothing has been decided and that authorities are still gathering industry feedback. The finance ministry and the Bank of Korea also said that under the Foreign Exchange Transactions Act, only companies registered as virtual asset service providers, or VASPs, can engage in overseas virtual-asset transfer services. Expanding eligibility to non-VASP operators is not under review.

Industry participants say regulatory changes are needed given the growth of the global digital-asset market. Attention is now turning to future discussions on the Digital Asset Basic Act and the policy direction of Han Sung-sook, the nominee for prime minister.