Min Byung-deok: "DAXA raises concerns of conflicts of interest… Market surveillance should be conducted by a separate association"

Min Byung-deok, a Democratic Party of Korea lawmaker who proposed the Digital Asset Basic Act, said on the 10th that there are "concerns of conflicts of interest" regarding the 'Digital Asset Exchange Joint Consultative Body (DAXA, DAXA),' which is a consortium of domestic cryptocurrency exchanges such as Bithumb and Upbit.

At a press conference for the proposal of the Digital Asset Basic Act held at the National Assembly press center in Yeouido, Seoul, Min stated, "(In practice) DAXA is composed of the exchanges themselves," adding this perspective. He explained, "Tasks related to (virtual asset) listing support, maintenance, and delisting should also be handled by the Listing Eligibility Evaluation Committee under the Digital Asset Industry Association," and further remarked, "The Market Surveillance Committee within the association should be responsible for market oversight related to unfair trading, as this is the way to prevent conflicts of interest."

The Digital Asset Basic Act, for which Min was the lead proposer that day, includes a plan to establish the Digital Asset Industry Association. Specifically, the bill stipulates that both a Listing Eligibility Evaluation Committee and a Market Surveillance Committee must be set up under the association. The Listing Eligibility Evaluation Committee will be in charge of assessing and reviewing listings and delistings of virtual assets, while the Market Surveillance Committee will handle compliance and duties related to unfair trading activities. Min emphasized, "Since exchanges always face conflict of interest issues, market surveillance and other functions cannot be entrusted solely to DAXA," adding, "The association will decide on the support and termination of (virtual asset) trading."

Regarding regulation on dollar-based stablecoins, he commented, "It is meaningless." Min said, "There is no way to directly regulate (dollar stablecoins)," and, "We cannot require issuers of dollar-pegged stablecoins to register and obtain approval in Korea."

He also addressed the appropriateness of the term 'virtual asset.' Min explained, "The term 'virtual asset' itself is negative," adding, "I chose to use the term 'digital asset,' since these assets exist as digital assets with substance." He continued, "If (the Basic Act) passes, the Virtual Asset User Protection Act will disappear," and, "Anti-money laundering provisions currently under the Specific Financial Information Act (KoFIU Act) will be incorporated into the Basic Act."