The South Korean central bank is set to be granted the right to investigate virtual assets after the Financial Services Commission (FSC) dropped its opposition to the move. According to a report, the FSC dropped its opposition to the central bank’s bid after it was accused of seeking to make itself the country’s sole regulator of virtual assets.
The Battle to Control and Regulate Virtual Assets
The Bank of Korea (BOK) is set to be granted its wish to investigate virtual assets after the country’s Financial Services Commission reportedly dropped its opposition to the central bank’s desire to gain the “right to request data submission.” As per a local report, the FSC’s decision came a few weeks after a subcommittee of the Korean Parliament’s Political Affairs Committee accused the regulator of seeking to make itself the sole regulator of virtual assets.
According to the report, the FSC’s decision to drop its demand came amid claims the Korean National Assembly will be proceeding with plans to include the BOK’s right to request data in the Virtual Assets Act.
Before finally acceding to the central bank’s demand, the FSC had repeatedly clashed with the BOK over which of the two institutions should supervise payments and settlements. The central bank, on the other hand, has insisted on being granted the right to investigate digital assets because risks that emanate from virtual asset markets ultimately threaten financial stability.
FSC’s Monopolistic Ambitions
However, the April 20 report said accusations about the FSC’s desire to be the sole authority on virtual assets, and its willingness to disregard both the ruling and opposition parties in its pursuit, may have forced the regulator to concede. The same point about the FSC’s intention was similarly raised by Korean lawmaker Kim Han-gyu on March 28.
“The Financial Services Commission acknowledges that it is necessary for the Bank of Korea to have the right to request data, but refuses to include it in the bill,” Kim said at the time.
Still, despite seemingly surrendering in its long-running fight with the central bank, the FSC will still likely gain the right to investigate virtual assets, the report revealed. It said many of the proposed bills on virtual assets seek to give the FSC the authority to investigate “unfair transactions.”
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Author: Terence Zimwara