Financial Services Commission of South Korea proposes strict fresh rules for token issuers


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The Financial Services Commission (FSC) in South Korea has released a report laying out its new definition of cryptocurrencies and digital assets. It also proposed new methods for token issuers and penalties for non-compliance.

Individuals or platforms that mint non-art NFTs for trading purposes, as well as decentralized finance projects, could face onerous regulations under the proposed guidelines. According to a report released on Nov. 23, the FSC proposed items in the Act on the Protection of Cryptocurrency Users, which have been forwarded to the National Assembly for consideration and approval.

These items include guidelines for token issuers who want their coins to be traded on Korean exchanges and potential penalties for individuals who are making “undue profit through market manipulation or trading on unreported data.”

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Is South Korea not clear on its views?

As TheCoinRise reported previously, the South Korean investors are confused with the conflicting statements of the regulatory authorities. For example, the officials in South Korea first decided not to tax NFTs but later changed their plans to impose tax on them. Now the country is redefining what crypto means to them.

The FSC wants ICO operators, Decentralized Autonomous Organizations (DAO), and nonfungible token (NFT) minting services to submit their whitepapers. These entities are also required to obtain a rating and legal review from a recognized token evaluation firm along with disclosing regular business reports to its users.

FSC also classifies privacy tokens like Monero (XMR) and stablecoins like Tether (USDT) under cryptocurrencies.

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The report mentions that if an individual or service fails to comply with the rules, it will have to face the penalty with a minimum of five years of prison and three to five times of the “unfair profits” made. The report defines unfair profits as any profit made while the business was in non-compliance with the law. 

Regulators in different countries are tightening the crypto firms and exchanges. Many huge firms have started taking the instructions seriously, including Bitfinex, who recently told about his AML compliance tool made by Notabene.

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