Hello?

I am Langil Kim, the president of the Digital Asset Fair Trade Association.

 

Today, we would like to discuss the current situation of the Korean blockchain industry and digital asset (virtual asset) market and ways to rectify it with all those involved in the blockchain industry, all participants in the digital asset market, and all stakeholders in the blockchain academia and research community.

 

As the transaction price of blockchain-based digital assets soared in January 2018, the government presented strong regulations on the digital asset market, and quelled the investment craze with a workaround that only restricts market expansion and participation without any laws and systems in place on digital assets and investment markets.

 

After that, the FSC was given the management and supervision function of the digital asset market through the enactment of the Act on Reporting and Usage of Specific FinancialTransaction Information, but the Korean digital asset market is facing the greatest crisis due to the FSC's unfair market regulation.

 

According to the Act on Reporting and Usage of Specific FinancialTransaction Information, in order to operate a virtual asset exchange business, it is required to pass ISMS certification, obtain a real-name verification account from a commercial bank, and report a virtual asset trading operator to the Korea Financial Intelligence Unit. Currently, the FSC is putting pressure on commercial banks to disallow the issuance of new real-name verification accounts on virtual asset exchanges.

 

In other words, the FSC is showing the people the image of an administrative agency dominating the law through arbitrary interpretations and expedients regardless of the purpose of theAct on Reporting andUsage of Specific FinancialTransaction Information (Enforcement Decree of the Act on Reporting and Usage of Specific FinancialTransaction Information) passed at the Political Affairs Committee of the National Assembly and approved by a majority of the members of the National Assembly.

 

The FSC and the National Assembly will have to give an accurate explanation of ISMS certification is required if the issuance of a real-name verification account is not allowed in the first place and on what basis is the discrimination between the four major exchanges that have previously received real-name verification accounts and latecomers.

 

Currently, if virtual asset exchanges that have completed ISMS certification and real-name verification account issuance by September 25, the reporting deadline of FIU (Financial Intelligence Unit) stipulated in theAct on Reporting and Usage of Specific FinancialTransaction Information, fail to complete the report, these exchanges will not be able to make deposits and withdrawals in KRW. As a result, the entire digital asset market in Korea will fall into great chaos.

 

If more than 200 exchanges shut down at the same time, ① digital assets (cryptocurrency) and customer deposits stored in the exchange will disappear or become insolvent without any protection,

 

② Exchanges will face a crisis of forced shut down despite their preparation for normal business in accordance with theAct on Reporting and Usage of Specific FinancialTransaction Information

 

③ The Korean blockchain industry and digital asset-related industries will fall into a swamp of stagnation for a long time.

 

The Digital Asset Fair Trade Association, its member companies, individual members, and the entire related industry demand the National Assembly, the Financial Services Commission, and the administration.

 

1. 'Virtual assets' stipulated in theAct on Reporting and Usage of Specific FinancialTransaction Information should be corrected as 'digital assets' in line with international standards and future development directions, and it is necessary to protect and nurture the ‘digital asset’ market and industry in a positive way rather than a negative wayin enacting the Digital Asset Trade Act

 

2. ISMS-P certification and real-name verification accounts should be issued to a company that properly understands the purpose of the currentAct on Reporting and Usage of Specific FinancialTransaction Information and has completed technical and financial preparations for normal digital asset exchange business. In particular, the refusal to issue a real-name verification account due to the sanctions imposed by the FSC on the banking sector should be withdrawnimmediately.

 

3. As the report of the digital asset exchanges to the Financial Intelligence Unit (FIU) scheduled as September 25, 2021 is virtually impossible due to the FSC's sanctions on issuance of real-name verification accounts, it is necessary to reduce the damage to the industry and investors by passing a bill to extend for the next six months or issuing an executive order.

 

4. The existing four exchanges that have already received real-name verification accounts could receive accounts because their business was quick in time rather than already passing the standards of the Act on Reporting and Usage of Specific FinancialTransaction Information. Therefore, the review of the exchange approval should be carried out under the same standards and the same conditions without any discrimination between the existing four exchanges and small and medium-sized exchanges.

 

5. Through the complete investigation into illegal acts such as collusion and manipulation that may cause damage to investors including collusion between issuers and exchanges, unnecessary request for listing fees, listing review for not meeting standards and price manipulation in all exchanges currently operating digital asset exchanges, it is necessary to revoke the certification of the exchange where there was an illegal act and suspend the exchange business.

 

6. In order to realize the ideology of a capital democratic society of fair competition and economic growth through investment, it is necessary to establish a fair listing review system in connection with a specialized institution that can select high-quality digital assets, end unnecessary listing fee requirements, and establish a virtuous cycle of investment capital and industrial development to promote the development of the Korean blockchain industry and digital asset market.

 

Until now, the Korean blockchain industry and academia, related administrative departments, digital asset market industry, investors, issuers, and issuing companies, etc., have been suffering from the prejudice and misunderstanding of the Korean government about blockchain, and are faced with the reality of maintaining a level of technology that is significantly behind that of the leading countries.

 

As all of you know, the whole world and Korea are facing a future that requires the use of blockchain technology to record and preserve the circulation of money, identification of citizens, and data of each citizen.

 

In addition, the era of using blockchain technology is coming for records and distribution of real estate, stocks, and bonds as well as monetary systems and transactions in the metaverse world.

 

The distribution and investment of blockchain technology and digital assets are no longer a fantasy of the distant future, but the real life we live in today and have become an essential economic element.

 

Nevertheless, it is true that there was no neutral group or organization to understand the current state of the industry, convey the reality of the industry, and take care of the difficulties of the industry, making it difficult to speak for the industry.

 

Thus, we, Digital Asset Fair Trade Association, will speak for the rights and interests of the industry and the whole market under the slogan of ‘Fair Competition and Fair Trade’ in a neutral position for issuers, exchanges, and investors.

 

We ask all stakeholders to participate in the signing of this statement and to pay close attention so that this statement can be delivered to the National Assembly, the FSC, and the administration.

 

The meaningful traces of all going together are more meaningful than the big steps of an individual taking the lead.

Thank you!!