South Korea’s Financial Services Commission (FSC) has reportedly carried out the issuance of a report detailing the new definition of crypto, together with proposed procedures for token issuers and punishments for non-compliance.
Specifically, the freshly revised regulation could lead to the appearance of heavy legislation on people or platforms which mint non-art NFT particularly for trading, together with decentralized finance initiatives.
The report generated by the FSC provided specific information on items appearing in its proposal in the Act on the Protection of Cryptocurrency Users, which has been put up to the National Assembly for further discussion.
It aims to establish rules dedicated to token issuers, who have a desire of seeing their tokens available for trading across Korean exchanges, as well as recommending punishments for the ones the FSC classified as making “undue profit through market manipulation or trading on undisclosed information.”
The report initially mentioned token-issuing establishments, which cover initial coin offering operators, decentralized autonomous organizations, NFT minting services and potentially others.
The FSC would reportedly make it mandatory for said institutions to complete the submission of a white paper, obtain a favorable rating from a token evaluation service with certain recognition, securing a legal review of the initiative, together with revealing regular business reports to users.
Initially, the FSC had not granted the legal status of assets to be regulated for NFTs, but adjustments have been made to that decision in November.
It further recognizes privacy tokens, nominally Monero (XMR) and stablecoins like Tether (USDT) to be crypto legally, while central bank digital currencies are not.