While the ‘Ping Pong Game’ between the related ministries surrounding the cryptocurrency ministries such as the Financial Services Commission and the Ministry of Strategy and Finance is continuing, it is pointed out that the legal status of virtual assets should be clarified and the control tower should be established or designated as the competent ministry to coordinate systematic ministries.
The National Assembly Legislative Investigation Office said on October 10, “The Financial Supervisory Commission is responding passively to the question of whether it is involved in investor protection, considering that it is difficult to recognize virtual assets.”
Recently, the cryptocurrency market has been rapidly expanding, but in Korea, it is still unable to decide which ministries should act as ‘government departments’. Recently, Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki expressed his view that the Financial Supervisory Commission should take charge of the role of the ministry to deal with cryptocurrency issues, but the financial sector has been showing signs of disapproval.
However, the legislative investigation office said, “Although the financial concern about the virtual asset speculation craze is fully sympathetic, the damage caused by the hacking of the exchange and the manipulation of the market since 2017 is continuously occurring.” It is time to actively discuss the legal status of virtual assets, related ministries, policy direction, taxation plan, establishment of fair and transparent market order, “He said.
Earlier, the government revised the “Act on Reporting and Utilization of Specific Financial Transaction Information” on March 24 last year, taking into account recommendations from international organizations such as the G20 Summit and the Anti-Money Laundering Organization (FATA). However, the special money law focuses on preventing money laundering, and laws for stabilization and activation of transactions such as protection of virtual asset users are insufficient.
It is difficult for related ministries such as the Financial Supervisory Commission to recognize virtual assets as currency, currency or financial products. However, the Financial Supervisory Service has recently included virtual assets such as bitcoin, Ethereum, and Ripple in the domestic PinTech status.
The Bank of Korea believes that virtual assets are not applicable to any of the money, electronic payment means, or financial investment products, and can be interpreted as a kind of digital form of goods because they 폰테크 exist in the form of electronic information without tangible reality and can be subject to independent trading. The Supreme Court also said that bitcoin, an intangible property with property value, is a kind of virtual currency that digitally represents economic value for bitcoin and allows electronic transfer, storage and transaction.
Central bank governors of major overseas countries such as the United States, Japan, and France have also expressed their view that cryptocurrency assets are difficult to become legal currencies, but recently cases have been found to be recognized as financial assets or means of payment.
The United States applies different disciplines from the viewpoint of securities or commodities. If virtual assets meet the definition of securities, the US Securities and Exchange Commission (SEC) applies securities supervision regulations and treats them as regulatory targets similar to legal currency through the Bank Secret Protection Act when they function as a medium of exchange.
Japan has included cryptocurrencies within the scope of financial instruments through the 2019 Financial Products Transactions Act and the Financial Settlement Act; it has also imposed a duty of protecting users on cryptocurrency exchangers and managers. Germany stipulates that cryptocurrency is a financial investment product in the Banking Act, and the Federal Financial Supervisory Service’s guidelines regulate cryptocurrency consignment as a new financial service.
“When we look at these cases, we do not simply dismiss the phenomenon of funding virtual assets as a ‘wrong road’, but we need to curb indiscriminate speculation under regulatory vacuum and prevent user damage,” the survey said.
However, since 2017, when virtual assets have become a social issue, the government has responded to the issue by co-organizing 10 ministries, including the Financial Supervisory Commission, in the form of a consultative body.However, due to the ‘dividing’ phenomenon between ministries that are acting in the situation where the government’s official position on the legal nature of virtual assets is not expressed, the government’s role and responsibility for securing information transparency of virtual asset transactions, preventing transaction damage and remedies remain uncertain.