South Korea Considers New Blockchain Platform Regulations

South Korea's ruling party is apparently mulling new regulations for blockchain-based services.

Following recent market turmoil that has shaken confidence and fueled fears of a large-scale crypto contagion, South Korea's ruling party is reportedly considering new consumer protection regulations.

Rep. Sung Il-jong of the People Power Party (PPP) said Monday that his party is considering presenting legislation for "blockchain-based platforms," without specifying what is planned, in order to better safeguard investors.

During a party-government consultative meeting on digital assets on Monday, the minister expressed the government's aims.

Sung pointed to elements already included in the special financial transaction law, which tries to oversee money laundering and terrorism funding, but said the law was not constructed to deal particularly with cryptocurrency, according to Yonhap News.

The PPP and its integrated Financial Supervisory Service (FSS), which oversees financial institutions directly under the Financial Services Commission's supervision, will also work to build a self-regulation framework.

During the conference, five of the country's largest exchanges, including Upbit, Korbit, Bithumb, Coinone, and Gopax, raised their hands to form a joint consultative council to monitor compliance with new and existing rules.

The likelihood of further sanctions follows the collapse of TerraUSD, which sent shockwaves through entire digital asset sectors in May as anxiety gripped the crypto market and led regulators to intervene.

The ruling party's assessment comes as crypto lender Celsius stated it will restrict withdrawals and transfers from its platform due to "extreme market conditions."