On May 18, the Bank of Korea released a report titled "Assessing Defects in the Crypto Asset Market and Their Impact on Major Global Events." The report stated that if deposits or loans in the encrypted asset market are the same as the traditional financial industry and face the same risks, the encrypted market should be subject to the same regulation as the existing industry.
According to the specific analysis of the report, through the investigation of major events such as the Terra Luna crisis, Celsius, Three Arrows Capital, and FTX bankruptcy that occurred last year, the central bank found similarities with the loopholes that appeared in the traditional financial market in the past, such as unsustainable business structures, Liquidity risk, leverage, opaque financials, etc. Although the major events that occurred in the encryption market last year did not have an impact on the entire financial system, as the connection between encrypted assets and traditional financial markets is gradually strengthened, it may pose a threat to the financial system in the future. Therefore, legislation should also be passed for encrypted assets to apply the principle of "same behavior, same risk, and same supervision". (Seoul Economic Daily)
According to the specific analysis of the report, through the investigation of major events such as the Terra Luna crisis, Celsius, Three Arrows Capital, and FTX bankruptcy that occurred last year, the central bank found similarities with the loopholes that appeared in the traditional financial market in the past, such as unsustainable business structures, Liquidity risk, leverage, opaque financials, etc. Although the major events that occurred in the encryption market last year did not have an impact on the entire financial system, as the connection between encrypted assets and traditional financial markets is gradually strengthened, it may pose a threat to the financial system in the future. Therefore, legislation should also be passed for encrypted assets to apply the principle of "same behavior, same risk, and same supervision". (Seoul Economic Daily)