Veriscope Regulatory Recap - 1st to 16th June

Author

Shyft Network
June 18, 2024

Welcome to the latest issue of the Veriscope Regulatory Recap. In this edition, we analyze the recent regulatory developments in Taiwan and South Korea.

Taiwan's Proactive Stance with the VASP Association

Taiwan has seen a unique development with the creation of the Taiwan Virtual Asset Service Provider (VASP) Association. 

Formed by 24 local crypto firms, the association is a response to the Justice Ministry's proposed amendments to Anti-Money Laundering (AML) rules for crypto operations. These changes could introduce penalties for non-compliance, including fines and prison time. 

The association's goal is to work with the government to ensure fair regulations that balance growth with fraud prevention. 

This development has both pros and cons. On the upside, this collaborative effort between the industry and government could foster a more stable and growth-oriented market environment, enhancing Taiwan’s position as a forward-thinking hub for digital assets. 

The association also faces challenges, particularly in aligning the diverse interests of its members with the strict requirements proposed by the Justice Ministry. The severity of the penalties for non-compliance, ranging from heavy fines to imprisonment, places significant pressure on the association to not only ensure adherence to these rules but also advocate effectively for regulations that do not stifle innovation. 

So, will other countries follow in Taiwan's footsteps?

South Korea's New Guidelines on NFTs

On the other side of the strait, South Korea has taken a different path, focusing on the classification of non-fungible tokens (NFTs).

 The Financial Services Commission (FSC) of South Korea recently announced that certain NFTs, which are mass-produced and used similarly to cryptocurrencies, will now be regulated under existing cryptocurrency laws. 

This is a significant move that can impact the global NFT landscape, as South Korea is one of the largest markets globally for NFTs. According to Statista, NFT sales are projected to reach $58M by 2028 from $38M in 2024.

Through this move, South Korean authorities aim to bring clarity and stability to the NFT market by treating NFTs similarly to other digital assets.

This move provides clearer legal boundaries and increased protection for investors, potentially making South Korea a more attractive market for institutional investment in NFTs and enhancing the overall stability of the digital asset sector. On the other hand, these regulations might also bring challenges for NFT creators and platforms, who will now face stricter compliance requirements. 

What's Next?

As both countries refine their regulatory frameworks, the global crypto market watches closely. Taiwan's and South Korea's different approaches reflect their unique market dynamics and regulatory philosophies. It's essential for crypto industry stakeholders to stay informed about these changes as they develop.

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‍About Veriscope

‍Veriscope, the compliance infrastructure on Shyft Network, empowers Virtual Asset Service Providers (VASPs) with the only frictionless solution for complying with the FATF Travel Rule. Enhanced by User Signing, it enables VASPs to directly request cryptographic proof from users’ non-custodial wallets, streamlining the compliance process.

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