South Korean legal, academic experts criticize proposed crypto regulations

Legal and academic experts in South Korea have expressed pessimistic views that proposed ownership caps for virtual asset exchanges and stablecoins could lead to industrial decline and legal disputes, Money Today reported. The concerns were raised ahead of the enactment of a Digital Asset Basic Act. At a policy debate on Feb. 26 hosted by lawmakers Kim Sang-hoon and Min Byoung-dug, attorney Jeong Jae-wook of Joowon Law Firm argued that it is strange to apply regulations designed for the Korea Exchange to crypto exchanges, which do not have member securities firms. He stated that if the regulations are implemented, it could become difficult for the private sector to venture into new business areas. Concerns also emerged regarding the financial authorities' plan to restrict the issuance of won-denominated stablecoins to consortiums in which a bank holds a majority stake of 50% plus one share. Lee Jong-seop, a professor at Seoul National University's College of Business Administration, said there is no economic correlation between a stablecoin's ownership structure and its ability to prevent mass withdrawals. He noted that while a bank's majority ownership is a rational choice for authorities as it ensures supervisory convenience, the discussion on a stablecoin's trust mechanism should be market-driven.