#South Korean Banks Given Permission to Investigate Virtual Asset Business

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 banks in South Korea may have the right to investigate virtual asset business. The Bank of Korea is looking to clarify this in the Virtual Asset Law, which would enable banks to demand data from virtual asset operators and issuers. Previously, the South Korean Financial Commission did not support this plan, but now the institution intends to agree to it. Currently, Congress is gathering government opinions, and the Financial Services Commission plans to officially express its position at the first subcommittee of the bill on April 25th.
##What is the Virtual Asset Law?
The Virtual Asset Law implemented in March 2021 intends to regulate the virtual asset market in South Korea. This law enforces financial institutions to engage in due diligence checks when dealing with virtual asset traders. Virtual asset transactions will also need to follow these regulations, and failure to do so will result in hefty fines. The law aims to regulate virtual asset trading to prevent cyber fraud and money laundering.
##What is the New Proposal All About?
The Bank of Korea recently proposed a new addition to the Virtual Asset Law, which would enable banks to have the authority to demand data from virtual asset operators and issuers. The proposal became vital after recent cybercrimes in the virtual asset market. By giving banks such authority, the government feels that they can prevent these cybercrimes from happening and protect investors.
##Why Does the South Korean Financial Commission Support the Proposal Now?
The South Korean Financial Commission declined the proposal initially because they were concerned that it could lead to data leaks and other data-related issues. However, after thorough consideration, they saw the need for banks to have such authority to avoid creating problems for virtual asset exchanges. In the virtual asset market, storage of data is a crucial aspect, and issues like a data leak could significantly affect the development of the market.
##What Does This Mean for Virtual Asset Operators and Issuers?
Virtual asset operators and issuers will now have to comply with new regulations, and banks will have the authority to demand data from them. The government feels that this will help in preventing cyber fraud and money laundering. However, this could also lead to hesitation from the virtual asset traders as they might feel exposed, and it could affect their trading activities.
##Conclusion
The South Korean government has taken steps to ensure that the virtual asset market in the country is regulated and secured. By proposing the addition to the Virtual Asset Law, the government hopes to prevent cybercrimes and money laundering in the virtual asset market. The recent announcement of banks having the authority to investigate virtual asset business raises many questions concerning data security and protection of virtual asset operators and issuers. It will be interesting to see how the government, virtual asset operators, and issuers navigate through this new development.
###FAQs
1. Why did the South Korean Financial Commission initially decline the proposal?
Ans. The South Korean Financial commission initially declined the proposal because of concerns related to data leaks and other data-related issues.
2. Will the new proposal affect the virtual asset traders in South Korea?
Ans. The new proposal could affect the trading activities of virtual asset traders in South Korea, as they might feel exposed.
3. How does the government plan on preventing cyber fraud and money laundering in the virtual asset market?
Ans. The government plans to prevent cyber fraud and money laundering in the virtual asset market by enforcing due diligence checks when dealing with virtual asset traders and ensuring compliance with regulations.