South Korean regulator says DeFi and NFT regulations are coming
The crypto industry in South Korea is bracing for another round of potentially restrictive regulations – with a financial regulator hinting that, after subjecting crypto exchanges to some of the world’s most restrictive regulations, finance Decentralized (DeFi) and the Non-Fungible Token (NFT) were next in line.
In an interview with Maeil Kyungjae, the head of the Financial Intelligence Unit (CRF) Kim Jeong-gak said South Korea is keeping an eye out for future NFT and DeFi recommendations coming soon. Financial action group (FATF), adding that the nation would strive for “international coherence”.
But he also added:
“We are going to think about how to [regulate the two sectors] with the relevant ministries and reflect these [decisions] with [amended] financial law.
Kim also issued some sort of warning to the crypto trading industry, already reeling from a crackdown that left only four trading platforms trading coins for fiat KRW. Kim said the FIU intends to “manage and oversee virtual currency exchanges to the same high standards as banks.”
He claimed that money laundering in the crypto-asset market is more likely to occur than in highly regulated financial institutions such as banks.
He said regulators “should focus more on” crypto-asset trading operators and “closely monitor” companies going forward.
So far only two exchanges – the country’s leading trading platform Korbit and the market leader Upbit, have received full operating permits from the FIU, with applications from competitors Bithumb and Coinone still under study. The rest of the country’s once thriving trading industry has been forced to shut down or offer crypto-only exchanges.
Critics say the government and regulators have allowed a four-company “monopoly” or “oligopoly” to emerge, killing promising and innovative companies along the way.
But Kim ignored these criticisms, saying:
“The concern about monopolies is a phenomenon that naturally arises during the process of implementing a new system. “
– Games propel growth in Dapps sphere as DeFi and NFT lose pace
– High returns attract institutions to DeFi, but obstacles remain
– US watchdogs send more warning signs to Altcoins and DeFi, but Coinbase has a plan
– Here’s how NFTs could change the TV and film industries