South Korean legislature considering new licensing system for crypto

cointelegraph.com:

A report commissioned by South Korea’s federal government recommends the domestic crypto industry adopt a licensing system for exchanges and token issuers as a way of protecting investors.

The report issued by the Financial Services Commission (FSC) to the National Assembly, the country’s legislature, also calls for new regulations to mitigate insider trading, pump and dump schemes, and wash trading.

The new regulations would be stricter, and the penalties for failure to comply would be harsher, than those in the Capital Markets Act that the domestic crypto industry currently abides by.

The Comparative Analysis of the Virtual Property Industry Act  report obtained exclusively by Korea Economic Daily on May 17 reveals a recommendation to establish a licensing system that would apply to coin issuers, such as companies that operate initial coin offerings (ICO) and crypto exchanges. Varying degrees of licenses would be issued based on the risk involved.

Regulating coin issuers through a robust licensing system is considered the “most urgently needed protection” in the market today. That position may be underscored by the untimely market crash sparked by the fall of the Terra (LUNA) project, whose South Korean founder Do Kwon may find himself called before the National Assembly to explain what happened.

One recommended regulation would force coin issuers to submit a white paper to the FSC about their project that includes details about the company’s officers, how it plans to use funds raised through an ICO, and what risks are associated with the project. Updates to the white paper would have to be submitted at least seven days before proposed changes could take effect.

Even companies with headquarters abroad that want their