Cryptocurrency Exchanges Face Reduction in Business Scope in South Korea

Cryptocurrency Exchanges Face Reduction in Business Scope in South Korea

South Korea's financial authorities are planning to reduce the business scope of domestic cryptocurrency exchanges. Currently, these exchanges handle all aspects of the cryptocurrency trading process, including listing, trading, settlement, and custody. However, the authorities believe that separating these functions would enhance market safety and consumer protection. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have submitted a report to the National Assembly's Political Affairs Committee outlining the direction of virtual asset regulation and future legislative review tasks. The report suggests splitting the operations of cryptocurrency exchanges into distinct categories: Exchange business Listing business Deposit business Custody and management business * Advisory and discretionary business The authorities propose separating custody and management business, as well as advisory and discretionary business, from cryptocurrency exchanges. They believe this would reduce the risks associated with these activities and strengthen market supervision. The issue of separating deposit and payment operations into separate business entities will be considered in the mid to long term, subject to market and regulatory developments. This move aims to enhance transparency and prevent conflicts of interest in the cryptocurrency market.