South Korean Banks May Gain the Authority to Monitor Virtual Asset Businesses

04/20/2023 09:11 • Metaverse Matters • 145 views

On April 20th, it was announced that South Korean banks may have the authority to investigate virtual asset business. According to sources from the Political Affairs Committee of the South Korean National Assembly, the Bank of Korea is seeking to clarify in the Virtual Asset Law that banks have the right to require virtual asset operators and issuers to submit data. Previously, the South Korean Financial Commission did not support this plan, but now the institution intends to agree to it. At present, Congress is collecting government opinions, and the Financial Services Commission plans to formally express this position at the first subcommittee of the bill on the 25th.

Korean media: Bank of Korea may have the right to investigate virtual asset business

The South Korean National Assembly’s Political Affairs Committee recently announced that South Korean banks may soon be granted the authority to investigate virtual asset businesses. The Bank of Korea is seeking to clarify the Virtual Asset Law and grant banks the right to require virtual asset operators and issuers to submit data.

What Is the Virtual Asset Law?

The Virtual Asset Law is a law in South Korea that regulates virtual assets and virtual asset service providers (VASPs). The law sets out guidelines for how VASPs and virtual asset transactions must be conducted in the country.

The Current State of Affairs

Previously, the South Korean Financial Commission did not support the Bank of Korea’s plan to grant banks the right to investigate virtual asset businesses. However, the institution has now changed its stance and is in favor of granting banks this authority.
Currently, the country’s Congress is collecting opinions from the government, and the Financial Services Commission plans to formally express its position regarding the matter at the first subcommittee of the bill on the 25th of April.

The Reasons for This Move

The Financial Services Commission believes that granting banks the authority to investigate virtual assets businesses will help in preventing financial crimes such as money laundering and terrorism financing.
The move is also aimed at ensuring that VASP service providers comply with the Virtual Asset Law, which stipulates that providers must maintain proper controls to detect and prevent money laundering activities.

What This Means for the Future of Virtual Asset Businesses

If South Korean banks are granted the authority to investigate virtual asset businesses, it will become increasingly difficult for virtual asset service providers to illegally facilitate money laundering and other financial crimes. The move can also be seen as an effort by the South Korean authorities to regulate the rapidly growing virtual asset market in the country.
However, it is important to note that the decision is still under review, and it will be some time before it is formally implemented.

Conclusion

The South Korean National Assembly’s Political Affairs Committee’s announcement is a significant step in the regulation of virtual asset businesses in the country. If the decision is implemented, we could see increased scrutiny of virtual asset service providers in South Korea.

FAQs

**Q1. How will this new authority affect virtual asset service providers in South Korea?**
A1. If this new authority is granted, the virtual asset service providers in South Korea will face increased scrutiny from banks and other regulatory authorities.
**Q2. Why are banks being granted this authority?**
A2. Banks are being granted this authority to help prevent financial crimes such as money laundering and terrorism financing.
**Q3. What is the Virtual Asset Law?**
A3. The Virtual Asset Law is a law in South Korea that regulates virtual assets and virtual asset service providers (VASPs). It sets out guidelines for how VASPs and virtual asset transactions must be conducted in the country.

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