FSS Governor Lee Says Talks With FIU on New Crypto Oversight Framework Are Near Completion

Lee Chan-jin, governor of the Financial Supervisory Service, said South Korea is expanding coordination with the Financial Intelligence Unit to strengthen oversight of virtual assets, or cryptocurrencies, and is in the final stages of building a new supervisory framework.

Newsis reported on Oct. 19 that Lee made the remarks during a parliamentary audit by the National Assembly's Political Affairs Committee after Democratic Party lawmaker Lee Kang-il said supervision of virtual assets is dispersed across the Financial Services Commission, the Financial Supervisory Service, the Financial Intelligence Unit and the Bank of Korea.

Lee Kang-il said he had raised the same issue in last year's parliamentary audit, when he was told it would be reflected in the second phase of digital-asset legislation, but a year has since passed.

He also cited Coinone's transactions with unreported operators and cases in which won-based exchanges violated the Act on Reporting and Use of Specific Financial Transaction Information, questioning the effectiveness of the current oversight system. He added that the Financial Supervisory Service had failed to prevent a Bitcoin overpayment incident at a domestic virtual-asset exchange despite conducting a prior inspection.

In response, Lee said the government's draft for the second phase of the Digital Asset Basic Act includes a strengthened supervisory framework, though it has not yet been announced.

Coordination with the Financial Intelligence Unit has already been strengthened from before, he said. Discussions on establishing a new oversight framework are also under way and are nearly complete.