FSC: Virtual Asset Exchange Listings to Shift from Self-Regulation to Public Regulation [Crypto Briefing]

[Financial News] The Financial Services Commission (FSC) is moving to shift the listing process for virtual asset exchanges from the current self-regulatory approach to a public regulatory framework. The goal is to enhance trading transparency and strengthen investor protection by applying stock market-level issuance, disclosure, and periodic listing disclosures for digital assets.
Lee Eog-weon, Chairman of the FSC (Photo) stated during a National Policy Committee audit at the National Assembly of the Republic of Korea on the 20th, “We are preparing a ‘second-stage virtual asset bill’ that will cover businesses, markets, and users, including regulations on Stablecoins.”
With major countries such as the USA, Japan, and the European Union (EU) institutionalizing Stablecoins and other virtual assets, the FSC intends to accelerate the establishment of a regulatory framework.
The FSC plans to require virtual asset exchanges to establish listing regulations, including criteria for listing and delisting, trading suspension and resumption, and disclosure requirements. This measure aims to address the issue of inadequate listing reviews. Previously, in May, the FSC announced the Amendment to the Best Practices for Virtual Asset Listing Support to prevent sudden price fluctuations (listing spikes) after new trading support (listing). The amendment’s core measures include mandating a minimum circulating supply before trading begins and restricting market orders for a certain period after trading starts. These changes are likely to be reflected in the second-stage legislation.
The second-stage bill includes several key elements beyond the transition to public regulation of listings. The legal term ‘virtual asset’ will be changed to ‘digital asset,’ and the concept of Distributed Ledger Technology (DLT) will be added to clarify definitions.
The scope of business operators will be subdivided into virtual asset exchanges, dealers, and custodians, and new basic business conduct regulations, such as a ban on front-running, will be introduced.
A regulatory framework for Stablecoins is also expected to be announced within the year. Chairman Lee noted regarding the introduction of Stablecoins, “Since we are in the early stages of designing the system, we are thoroughly reviewing it with relevant ministries to ensure sufficient safeguards,” adding, “We are in the final coordination stage.”
The FSC plans to introduce an issuer licensing system for Stablecoins and establish reserve asset management regulations requiring issuers to hold more than 100% in highly liquid assets such as deposits and government bonds. The FSC also intends to guarantee user redemption rights and develop regulatory frameworks for overseas Stablecoins such as Tether (USDT) and Circle.
An FSC official emphasized, “We will prepare the second-stage bill through consultations with relevant agencies and discussions with the Virtual Asset Committee, and support deliberations in the National Assembly of the Republic of Korea.”
Meanwhile, the FSC is conducting a joint research project with the Korea Fair Trade Commission (KFTC) regarding monopoly issues such as the high market share of Upbit and Bithumb, which are won-based virtual asset exchanges (KRW markets). An FSC official explained, “The research, which began in June this year, covers the current state of domestic and international virtual asset market regulations, competition impact assessments of existing regulations, and measures to promote competition. Once the research is completed in December, we will discuss improvement measures with the KFTC and reflect them in related institutional reforms.”
elikim@fnnews.com Kim Mi-hee Reporter