South Korea’s Financial Supervisory Service (FSS) is committed to safeguarding the crypto-space, Governor Lee Bok-Hyun revealed at a conference Monday. He announced plans to create crypto-asset monitoring tools and conduct routine assessments of potential risks associated with these assets.
While this could potentially be seen as intrusive, it should be welcomed – by investors and regulators alike – as an effort to ensure greater transparency within the sector. This will give users more confidence in the legitimacy of their investments.
At a forum on Monday, FSS governor Lee Bok-hyun also said accounting standards will be established to require companies to disclose their #crypto exposures.https://t.co/xHQPfOi3Wu
— Regulation Asia (@RegulationAsia) January 17, 2023
Why is the South Korean regulator taking this step?
The regulator is taking this step to ensure that they have the data needed to identify and address any potential risks that may arise from the increasing interconnection between the crypto market and traditional financial markets.
Lee emphasized that by utilizing crypto monitoring tools, the supervisory authority can gain a greater understanding of these risks and take appropriate measures to mitigate them. The supervisory authority will be better equipped to protect investors and prevent money laundering by monitoring these tools.
These tools will help the South Korean regulator ensure that the potential risks of a rapidly expanding domestic crypto market do not destabilize the country’s financial system.
Governor Lee noted that although the current impact on the financial system’s stability is low, it could sharply increase if the size of the virtual asset market grows significantly. To prevent this, the financial regulator establishes regulatory measures and monitoring mechanisms to ensure economic stability and long-term sustainability.
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