After the collapse of Terra LUNA and the failure of FTX, officials in South Korea are proposing new changes to the Digital Assets Bill to give them more authority over crypto exchanges.
Congressman Yoon Chang-Hyun is working on an amendment to give financial authorities in South Korea more control so that things like the FTX collapse wouldn’t happen again.
According to News 1, a Korean news station, Chang-Hyun has proposed giving the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) more power “in lieu of self-regulation” of cryptocurrency exchanges.
“Rep. Yoon Chang-Hyun of the People Power Party plans to propose a revision of the secure digital asset transactions bill at the first legislative review subcommittee of the National Assembly’s Political Affairs Committee held on the same day,” he said.
An anonymous member of the National Assembly stated that the new provision “was introduced to reflect on the FTX incident and prevent a recurrence.”
Customers’ funds must be kept in a separate account, to prevent fraudulent trading, as stipulated by the latest amendment to the Digital Assets Act. To prevent investor losses of several million dollars like the ones sustained by Terra LUNA, regulators will now be able to monitor and inspect cryptocurrency projects and exchanges.
South Korea Increases Scrutiny Over Industry
Importantly, authorities in South Korea have issued an arrest warrant in cooperation with Interpol and launched a fresh investigation to bring Terra’s founder, Do Kwon, to justice for his alleged role in the fraud that led to the collapse of the UST stablecoin.
Importantly, the Digital Assets Law was updated so that bitcoin exchanges no longer have the ability to unlawfully seize their customers’ funds once they have been transferred to a custodial bank. Such a case was seen in the recent case of FTX and Alameda Research which was pointed out by Binance CEO CZ, in his 6 commitments he provided recently.