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A report commissioned by South Korea’s federal authorities recommends the home crypto {industry} undertake a licensing system for exchanges and token issuers as a manner of defending traders.

The report issued by the Monetary Companies Fee (FSC) to the Nationwide Meeting, the nation’s legislature, additionally calls for brand new rules to mitigate insider buying and selling, pump-and-dump schemes and wash buying and selling.

The brand new rules could be stricter, and the penalties for failure to conform could be harsher than these within the Capital Markets Act that the home crypto {industry} at the moment abides by.

“The Comparative Evaluation of the Digital Property Trade Act” report obtained completely by Korea Financial Each day on Tuesday reveals a advice to ascertain a licensing system that might apply to coin issuers similar to corporations that function initial coin offerings (ICO) and crypto exchanges. Various levels of licenses could be issued primarily based on the danger concerned.

Regulating coin issuers via a strong licensing system is taken into account to be the “most urgently wanted safety” out there right now. That place could also be underscored by the untimely market crash sparked by the autumn of the Terra undertaking, whose South Korean founder Do Kwon may find himself called earlier than the Nationwide Meeting to clarify what occurred.

One advisable regulation would drive coin issuers to submit a white paper to the FSC about their undertaking that features particulars concerning the firm’s officers, the way it plans to make use of funds raised via an ICO and what dangers are related to the undertaking. Updates to the white paper must be submitted a minimum of seven days earlier than proposed adjustments might take impact.

Even corporations with headquarters overseas that need their tokens traded on Korean exchanges could be required to stick to the white paper rule.

It’s seemingly that the FSC had stablecoins on their agenda well before problems arose final week for TerraUSD (UST), Dei (DEI) and Tether (USDT). Nonetheless, there are suggestions to place necessities on stablecoin issuer asset administration that might apply to how they use collateral and what number of cash an issuer can mint.

The report additionally goals to curb shady buying and selling exercise which native exchanges and coin issuers have been accused of for years. It recommended rules on insider buying and selling, value manipulation, pump-and-dump schemes, wash buying and selling and industry-standard transaction charges.

Cointelegraph reported in April that an {industry} insider talking to native media acknowledged that provisions within the Capital Markets Act is probably not adequate to properly govern the crypto industry.

Associated: Leaked report: South Korea to establish crypto framework by 2024

South Korea’s new President, Yoon Seok-yeol, was elected partly as a result of his eagerness to grasp the crypto {industry}. On Could 3, he declared that his regime would push via a invoice that extends the tax-exempt status of crypto funding beneficial properties till a correct authorized framework is in place.

The report revealed right now may very well be the start of the framework President Yoon had in thoughts for the crypto {industry}.