The South Korean National Assembly's National Policy Committee held an audit of the Financial Services Committee (FSC), the country's top financial regulator, on Oct. 6.
The policy committee questioned FSC Chairman Koh Seung-beom, on matters related to domestic cryptocurrency exchanges, or VASPs (virtual asset service providers).
Lawmakers grilled Koh about the FSC's stance on crypto-specific legislation. Up until the audit, Koh and the FSC had made no clear statements concerning the necessity of legislation specific to the country's cryptocurrency and virtual asset industry.
Members of the National Policy Committee have repeatedly commented on the FSC’s aloofness on crypto legislation, some even calling it “a lack of cooperation.”
"The FSC will actively cooperate with legislators in the conversation around crypto legislation, and we will look into forming our own policy suggestions," Koh said.
This is the first time the FSC leader has provided an official stance on crypto legislation. As of now, there are eight bills on crypto legislation that various lawmakers have submitted for review by the National Assembly.
Koh’s comments come just a day after Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), testified before a House Financial Services Committee oversight hearing on crypto regulation. Gensler stated that the SEC has sufficient authority to regulate the American crypto industry without additional legislation from Congress.
Koh also said that the FSC will discuss with lawmakers how to regulate exchanges that operate without fiat on-ramps.
The Financial Transactions Reports Act (FTRA) requires all exchanges that do not have partnerships with commercial banks to forfeit their fiat on-ramps.
Among the 29 exchanges that submitted their applications for registering under the FSC's Financial Intelligence Unit (FIU), only the Big 4 -- Upbit, Bithumb, Korbit, and Coinone -- have secured bank partnerships.
Stance on potential Upbit monopoly
The most dominant player among the Big 4 is Upbit.
Upbit occupies around 80% of South Korea's total trade volume.
Noh Woong-rae, a lawmaker with the Democratic Party, has pointed out that this figure shot up to nearly 90% in early September, citing data gathered from CoinGecko.
Critics of the FTRA have called it a catalyst for the formation of a crypto monopoly by the Big 4. The Big 4 had already dominated the Korean ecosystem before the FTRA, but this domination is expected to magnify now that most of their competitors have officially been shut down.
But it looks like Upbit has a monopoly within the monopoly. Even as recently as last year, the gap between Upbit and Bithumb was minimal compared to what it is now.
Fast forward to Oct. 7, 2021. Upbit's trade volume on this day was a whopping $15.65 billion; Bithumb registered $1.89 billion. Upbit has grown exponentially while Bithumb has remained more-or-less the same.
Regarding Upbit's extravagant growth and potential monopoly, Koh said the FSC will "thoroughly investigate" the matter, adding it will check to see "whether there are any issues in their operation methods."
제보, 보도자료는 email@example.com