The Financial Services Commission (FSC) in South Korea proposed new amendments on Monday, February 5th, 2024, requiring approval for new executives at cryptocurrency exchanges before they can assume duties, potentially expanding the regulator’s authority over the local crypto industry.
The FSC said the amendments aim to “improve” issues with current laws governing the crypto sector. If passed, new executives at Korean crypto exchanges will need FSC approval of personnel change applications before starting work, which is not mandated under existing laws on financial transactions.
The proposed changes also allow the FSC to suspend license reviews if an exchange or its members face probes by domestic or foreign regulators. This empowers the FSC to revoke registrations for governance violations like improper executive elections, effectively barring those sentenced for crimes in the past 5 years from leadership roles.
Industry giant Binance is reportedly exploring reducing its stake in South Korean exchange GoPax, the largest shareholder, to address FSC concerns. GoPax’s structural changes have been pending approval since Binance’s acquisition, likely due to Binance’s U.S. legal issues.
The proposed amendments are undergoing revision by the Ministry of Government Legislation and will be voted on by the FSC. They are expected to be enacted by late March 2024, giving the regulator expanded oversight of leadership changes and operations at Korean crypto exchanges.
