The proposed amendment to South Korea’s virtual asset service provider reporting requirements is expected to go into effect by the end of March 2024.
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South Korea’s financial watchdog proposed amendments requiring new executives of crypto projects to get regulatory approval before they start working in crypto companies.
On Feb. 5, the Financial Services Commission (FSC) proposed a major change in its virtual asset service provider (VASP) reporting requirements. The proposal aims to give the FSC the authority to screen executives joining crypto companies. If enacted, the law would compel crypto firms to report changes in personnel to the financial regulator. With this, executives would not be able to start their jobs unless the FSC approves their personnel change report.
Local news outlet Money Today expects the amendment to go into effect by the end of March 2024 after going through several procedures, including a review from the Ministry of Government Legislation and a resolution by the FSC. Once the ordinance is revised, the rules will apply to VASP renewal reports to be made in the second half of 2024.
Furthermore, the proposed rules would affect companies’ ability to renew their VASP licenses. The amendments aim to give the FSC the power to suspend the review for VASP license registrations if local or international authorities are investigating its personnel.
The South Korean regulator is asking for the public’s feedback on the proposed amendment. The public has until March 4 to comment on the proposal.
South Korea’s regulators have been moving to introduce tighter regulations for the crypto space in the country. On Jan. 15, local outlet Decenter reported that South Korea’s Financial Intelligence Unit is working on legislation concerning crypto mixers. The regulator aims to introduce regulators similar to those in the United States as the use of crypto mixers for money laundering grows.
Earlier in January, the FSC expressed concerns about illegal outflows and money laundering that may happen when South Koreans buy crypto from foreign exchanges. On Jan. 3, the regulator published a legislative notice proposing a change to its credit finance laws that will prohibit locals from buying crypto with credit cards.