South Korea’s Financial Services Commission (FSC) has proposed significant changes to its reporting requirements for virtual asset service providers (VASP) to regulate the employment of executives in the sector. This amendment would mandate the vetting for executives joining crypto firms.

The proposed changes target crypto executives,
requiring regulatory approval before they can start working in crypto companies. According to a statement on the South Korean government’s website, this move aims to provide the FSC with authority over personnel changes in the
crypto industry. If approved, it will affect the renewal of the VASP licenses.

Impact on License Renewals

Under the proposed rules, companies seeking to renew
their VASP licenses would face scrutiny regarding their personnel. The FSC
would have the power to suspend license reviews if authorities are
investigating the company’s personnel for any reason.

Before the amendment becomes law, the FSC is seeking
public feedback until March 4, 2024. The proposed changes are expected to be
effective by the end of March 2024, following reviews and resolutions by
relevant authorities.

Recently, South Korea’s government took a decisive step to address the increasing risks of money laundering facilitated by crypto
mixers. The country’s financial authorities plan to implement regulations targeting these digital tools, which have become popular among
illegal organizations for concealing illicit transactions.

The Need for Regulation

In light of the vulnerability of the financial
system to money laundering, South Korea aims to restrict transactions using crypto mixers by virtual asset business operators. Additionally, the country plans to
monitor global trends and engage in international discussions to formulate a
strategy against the misuse of crypto mixers.

This approach aligns with recent actions by the US
Treasury Department’s FinCEN, which imposed stringent requirements on domestic
financial institutions involved in transactions with crypto mixers.

Besides that, the FSC has banned crypto users in South Korea from
using credit cards to purchase cryptocurrencies, citing concerns about the
illegal outflow of domestic funds and other related risks. According to the regulator, this move addresses
concerns regarding the illegal outflow of domestic funds overseas.

The FSC expressed worries about the increasing use
of credit cards for payments on overseas virtual asset exchanges, raising
concerns about money laundering and speculation.

This article was written by Jared Kirui at www.financemagnates.com.