尹 “Allow domestic coin issuance”… Exchanges are waiting for the enactment of the ‘Business Rights Act’

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key summary

尹 promises to ‘start with the disclosure of virtual assets through the exchange’
Industry revitalization expectations “Excellent domestic manpower will get opportunities”
There is also the possibility of ‘bad evaluation’… “The content of the Business Rights Act is key”
Preparations for the exchange are still… “Laws come first”
National Assembly Photo Foundation, Yonhap News

It is a current of anticipation in the industry with the promises related to virtual currency that President-elect Yoon Seok-yeol’s ‘negative regulation’ keynote is leading. In particular, it is generally predicted that the promise of allowing the domestic coin issuance (ICO), which has been blocked, in stages, on the premise of verification of a virtual currency exchange with safety devices, will be an important driving force for market revitalization, but in some cases, tight legal supplementation is a premise. There are voices that say it should be.

President-elect Yoon said during his presidential campaign, “at least in the digital asset field, we will switch to a negative regulatory system so that the private sector’s autonomy and creativity can be fully demonstrated without worrying about regulations.” Negative regulation means that everything will be allowed except for those prohibited by law, and the emphasis is on revitalizing the market.

One of his promises that reflects this recognition well is the phased acceptance of ICOs. ICO, or Initial Coin Offering, refers to an activity in which a business entity raises funds by issuing virtual currency and selling it to investors.

In Korea, the financial authorities judged it close to speculation and banned this activity entirely from 2017. The key reason was that the risk of fraud such as receiving similar messages would increase, and the damage to consumers could increase as speculative demand surges. For this reason, in the past, business entities have adopted a sort of bypass listing method in which business entities disclose virtual currency abroad and sell them on consignment by a domestic exchange.

In relation to the domestic ICO acceptance method through the pledge book, President-elect Yoon said, “First, we will start with the IEO (Initial Exchange Offering) method with safeguards in place. This will reduce risk by acting as a validator and intermediary between the project and investors.” Instead of conducting the ICO on its own, the issuer of virtual currency will first examine and act on behalf of it in a relatively safe zone called the virtual currency exchange.

Reporter Lee Han-hyung
Reporter Lee Han-hyung

The market is welcoming. An official in the virtual currency industry said, “If the promise is realized, excellent domestic human resources related to blockchain and virtual assets will be able to get opportunities without having to go abroad. this will be,” he said.

Some advise that market revitalization is important, but that the same weight should be given to the discussion of supplementing the system to protect investors, as question marks are placed on the review capabilities of exchanges. Currently, the Act on the Reporting and Use of Specific Financial Transaction Information (Special Act) acts as a ‘virtual asset real-name trading system’ and imposes related obligations on exchanges, but the content of fostering and regulating virtual assets as a separate industry The so-called Business Rights Act is in the stage of discussion in the National Assembly.

Hong Ki-hoon, a professor of business administration at Hongik University, said, “The Special Act is only a real-name system for virtual assets, and it is difficult to see it as a comprehensive regulation. “I think there should be regulations equivalent to the Capital Market Act. If there are weaker regulations, firstly, there is a risk of consumer harm, and secondly, there may be a controversy over reverse discrimination in the securities market.”

As such opinions exist, President-elect Yoon also promised to enact the ‘Basic Act on Digital Assets’, a business entity. The plan is to recover all profits from unfair virtual asset transactions, introduce and expand an insurance system against hacking and system errors, and foster specialized financial institutions that link virtual asset trading accounts with banks. How it will turn out is still unknown.

However, Rep. Yoon Chang-hyeon, chairman of the Special Committee on Virtual Assets within the People’s Power, was skeptical of the strict regulation, saying in a recent media interview, “It will be difficult to promote the virtual asset market if the regulated Capital Market Act is amended and applied.” There is also an opinion within the party that it is better to solve the issue of trust collateralization of exchanges in the process of realizing the promise to allow phased ICO through IEO in a way that not only the exchange but also a third organization conducts the coin examination in parallel.

In this uncertain situation, virtual currency exchanges are also waiting for the enactment of the Business Rights Act rather than immediately starting preparations for IEO-related practices. A working official said, “It is true that we need clear guidelines from the authorities,” said a working-level official. said.

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