In a significant move by South Korea’s Financial Services Commission (FSC), a proposal has been set forth that would compel executives in the cryptocurrency industry to seek regulatory approval prior to assuming their roles. Detailed in a recent publication on the FSC’s official website, the proposal is part of a suite of enhancements aimed at bolstering the integrity of the financial market.

While the FSC has not released the full specifics of the proposal, it is indicated that the new regulations are expected to be instituted by the conclusion of the first quarter in 2024. This initiative is pending a review by the Ministry of Government Legislation, after which more details will be made available.

The implications of this regulatory proposal extend beyond the crypto sector. FSC’s Chair, Lee Bok-hyun, has made clear the commission’s intention to clamp down on insufficient risk management practices. In a statement to Reuters, Lee affirmed that the FSC is resolute in its stance against transferring risks to consumers and the wider society through the privatization of short-term gains without adequate risk oversight.

Parallel to the FSC’s regulatory efforts, the South Korean President’s office has been active in deliberations over the financial regulator’s approach to Bitcoin exchange-traded funds (ETFs). There has been a push for South Korea to reevaluate its position on allowing spot Bitcoin ETFs to operate within its jurisdiction. This comes as a response to the approval of such ETFs in the United States and the need to consider international legal precedents in the context of South Korean law.

Tae Yoon Seong, the head of the political department in the presidential administration, highlighted the necessity for South Korea to adapt its legal framework to align with global financial innovations, particularly those related to cryptocurrencies.