Financial Services Commission Reorganization Plan Approved by State Council
The Financial Services Commission of South Korea has passed an organizational reorganization plan during the State Council meeting. This restructuring includes the establishment of a Digital Financial Policy Officer and dedicated departments for virtual assets, aimed at proactively addressing changes in the financial environment.
South Korea plans to establish a “Virtual Assets Division” by the end of June, focused on protecting user assets with a policy prohibiting civil servants from holding virtual assets.
Since July 2018, the temporary Financial Innovation Planning Group, which has operated for approximately six years, will now operate under the auspices of the Digital Financial Policy Officer. This move aims to respond to developments in new technologies such as artificial intelligence, big data, and blockchain, supporting the growth of fintech and large tech companies. With formal organization, twelve employees have transitioned to full-time roles, with an additional Level 5 civil servant appointed to oversee artificial intelligence applications in the financial sector.
To meet the upcoming Virtual Asset User Protection Act, effective July 19, 2024, a Virtual Assets Division has been established under the Digital Financial Policy Officer. This division will operate temporarily and will be responsible for establishing order in the virtual asset market and supervising user protection. Additionally, it plans to actively address unfair transactions involving virtual assets, including penalties and criminal prosecutions.
The temporary Financial Intelligence Unit (FIU) will continue operations, and the Virtual Assets Inspection Division’s mandate has been extended until the end of 2025. This extension is to maintain compliance with the Financial Action Task Force (FATF) standards and obligations under the Specific Financial Information Act for preventing money laundering among virtual asset operators. Regulatory inspections and sanctions against virtual asset operators will also continue.
In response to increased incidents of unfair trading practices in capital markets, three investigators have been added. This expansion is necessary due to evolving forms and tactics of unfair trading, exacerbated by a rise in capital market investors. The new investigators will actively pursue new tasks such as fines, estimates of illegal profits, and voluntary disclosure reductions.
The organizational reorganization plan of the Financial Services Commission, approved by South Korea’s State Council, will be announced and implemented on June 25. Furthermore, new positions have been established under the Total Human Resource Fund system: Chief of Meeting Operations Information and Chief of Accounting System. The Chief of Meeting Operations Information will support the smooth operation of the Financial Services Commission and oversee interdepartmental cooperation on informatization, while the Chief of Accounting System will handle policies related to corporate accounting.
Virtual Assets
South Korea