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Tuesday, May 30, 2023

South Korea to Regularly Inspect Crypto Risks With New Monitoring Tools

South Korea to Regularly Inspect Crypto Risks With New Monitoring Tools – The Financial Supervisory Service of South Korea is working on creating tools for monitoring cryptocurrency and regularly assessing the risks associated with it, according to the governor of the FSS, Lee Bok-hyun, who reportedly made this announcement at a conference on the relationship between the crypto market and traditional finance. He was quoted by local media as saying: “The Financial Supervisory Service is planning various initiatives for the risk management of the virtual asset market this year.”

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Lee stated that despite the expectation of increased connections between the crypto market and traditional financial market, the regulatory body currently lacks sufficient data to identify potential risks related to crypto. “In order to preemptively respond to risks in the virtual asset market, securing data is more important than anything else,” the FSS chief stressed. In addition, Lee said the regulator plans to establish new crypto-related disclosure obligations.

The FSS governor noted that no domestic financial company directly provides crypto-related services, adding: “Despite the growth of the virtual asset market, the direct impact on the stability of the financial system is still low.” Lee warned that if the domestic crypto market experiences significant growth, its potential effects on financial stability could become more pronounced.

Regulators worldwide have warned that the interconnectedness between the traditional financial market and the crypto market is increasing. The FSS chief pointed out that a number of countries are “introducing full-fledged regulatory measures for stablecoins” following the collapse of the Terra-luna ecosystem.


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