Leaked Document Shows South Korea Preparing Crypto Regulations by 2024

A leaked document shows the government of South Korea is planning to introduce a crypto framework in 2023, with implementation expected in 2024. Details on the framework are scarce, but it is focused on investor protection.

The South Korean government is planning a broad cryptocurrency regulatory framework called “the Digital Assets Basic Act” by 2024, according to leaked documents obtained by local media outlets. The government also plans to review the central bank’s central bank digital currency (CBDC).

The report suggests that the creation of crypto regulation is a high priority for the government. Crypto is very popular in the country, and the government has had to take multiple steps to ensure investor protection.

There are no details on the specifics of the regulation, though it is clear that it makes the asset class more a part of the system. It is not yet clear whether the government will explicitly state that bitcoin is not legal tender, however. 

The transition committee said: “We will strengthen the link between digital asset trading accounts and banks by expanding financial institutions that provide real-name verification services for virtual virtual transactions.”

South Korea’s previous actions include mandating that exchanges receive a license to operate, and even banning cryptocurrencies. The motivations underlying these decisions have been investor protection.

South Korea crypto exchanges issue warnings over trading Luna

As these plans for regulation come into play, crypto exchanges in South Korea have been warning users about trading LUNA. Coinone has suspended trading it, while Korbit and Bithumb have sent out warnings to users. 

The LUNA token and the UST stablecoin have both plunged sharply in price. The latter is at $0.13 at the time of publishing. The drop has sent shockwaves throughout the crypto world and caused enormous losses for both retail investors and companies. 

The worry surrounding LUNA and UST could worsen in the near future, if remedying measures fail to have the desired effect. This could be a watershed moment for the crypto market, as regulators have begun to take notice of the stablecoin’s decline.