Financial regulator should launch crypto-control tower

The Financial Services Commission (FSC) is facing mounting calls to become a cryptocurrency control tower mapping out cryptocurrency policies to watch over the surge in digital asset transactions here.

The Ministry of Economy and Finance and the FSC are engaged in a war of nerves trying to pass the buck onto each other, as neither side wants to “take risks” by assuming responsibility for supervising the burgeoning market.

The Office for Government Policy Coordination has served as a competent authority handling issues involving digital assets since 2017 when the cryptocurrency boom began here. The office has operated a committee discussing the issue with a group of 10 government authorities, including the finance ministry and the FSC.

But it is high time that one of the financial watchdogs should take on the role, spearheading cryptocurrency policies and setting up regulatory guidelines at a time when uncertainties continue to escalate over the future of the local cryptocurrency market.

Mounting uncertainties will end up confusing the market, raising the need for a single financial authority to set future directions for the burgeoning digital asset industry.

The FSC, meanwhile, refuses to recognize digital money, considering it to be a “currency without any inherent value.” Despite such a viewpoint, the market for digital asset transactions

has already grown so big here that the absence of a financial control tower is feared to leave a growing number of digital asset users vulnerable to the vicissitudes of the cryptocurrency market.

According to data from the nation’s four largest cryptocurrency exchanges, their total daily transaction volume topped 25 trillion won as of May 4. This exceeded the benchmark KOSPI, whose daily trading volume reached 15 trillion won during the same period.

Given the uncontrollably rapid growth of the market for digital assets, the FSC, whose primary role is to supervise financial transactions, needs to take another look at its earlier position, and take steps to protect customers against any possible hacking or illegal trading activities surrounding cryptocurrencies here.

On Tuesday morning, services for Upbit, one of the so-called big four crypto exchanges, was suspended for an hour without prior notice. But the lack of a control tower has left Upbit users feeling jittery, as no clear legal guidelines have been introduced over how to ensure the rights of cryptocurrency investors.

The government should be reminded that issuing repeated warnings is not a cure-all for the burgeoning cryptocurrency market.