South Korea Regulator Warns Companies Engaging in The Crypto Market

• • South Korea’s FSC sees the need to discuss more about allowing domestic companies to enter the crypto market.
  • The tech savvy country is supportive of the crypto market and its development.

The Financial Services Commission (FSC) of South Korea has warned against allowing domestic companies to enter the cryptocurrency market. FSC Chairman Kim Joo-Hyun said that more discussion was needed before making a decision, as there are risks involved.

Kim Joo-Hyun said:

“It is true that new trials and policies are needed, but as social conflicts are large and opinions are divided, there is a need for further discussion about what position Korea will take…technical supplements will be discussed in consideration of the specifics of issuance and distribution of virtual assets. It is being discussed in the Office of Government Policy Coordination with the Ministry of SMEs and Startups.”

The FSC is supportive of the cryptocurrency market and has even said that it would promote the use of the technology when necessary and if it would protect investors from any harm. However, the commission is concerned about the risks involved in allowing domestic companies to enter the market, such as the potential for fraud and market manipulation.

The FSC is not looking into passing new regulations, but is instead considering using existing laws to regulate the cryptocurrency market. The commission is also bearing in mind whether to go back on its ban of forbidding banks and financial institutions from facilitating cryptocurrency transactions.

South Korea is a tech-loving country and is home to some of the biggest electronics companies in the world. A large population of the younger people in South Korea are interested in cryptocurrency. Crypto investors from the country have a higher appetite for risk than their global counterparts.

XRP is the second most popular cryptocurrency in South Korea, with about 12.5% of the holdings. Other tokens held by South Korean investors include Solana, Dogecoin, and Cardano. Bitcoin and Ethereum make up about 26% of the holdings. This means that South Korean investors are more likely to spend on other tokens that are more risky and subject to volatility.

The FSC’s decision to warn against domestic companies entering the cryptocurrency market is a sign that the commission is still cautious about the technology. However, the commission’s willingness to consider using existing laws to regulate the market suggests that it is open to the idea of allowing cryptocurrency to operate in South Korea.