South Korea Plans Second-Phase Digital Asset Law and Separate Custody Oversight

South Korea’s Financial Services Commission said it will submit the government bill for the second phase of the Basic Act on Digital Assets as soon as possible, while coordinating the release of guidelines for corporate crypto asset trading with the legislative process. According to ChainCatcher, the regulator also plans to bring digital asset custody under separate business supervision and is cautious about forcing exchanges to spin off custody operations. South Korea also plans to reference the European Union’s approach to make it easier for traditional financial institutions to apply for virtual asset service provider licenses. On the issue of separating exchange custody businesses, the Financial Services Commission said forced breakups are rare overseas and that it prefers stronger conduct regulation to prevent conflicts of interest rather than requiring exchanges to operate custody businesses independently.