A South Korean finance regulator has revealed that the public should be careful about investing in the cryptocurrency industry, particularly local firms. The warning came from South Korea’s Financial Services Commission (FSC), with the agency stating that it’s important to be cautious about such moves.
The chairman of the Financial Services Commission (FSC), Kim Joo-Hyun, made the revelation during a financial strategy session held in Jung-Gu, Seoul. According to Kim Joo-Hyun, more discussion is necessary before authorities give domestic companies access to the crypto market.
He explained that the huge risk involved in the crypto market is one reason the government needs to pay more attention to the issue. Speaking during the event, he said: “It is true that new regulations and policies have become necessary. But there is a need for more discussion about the role of South Korea in this issue since there would be diverse takes on the issue”.
Nevertheless, South Korea has shown tremendous interest in innovations across the Metaverse and Web3 industries. The country also wants to explore blockchain technology to improve its economy.
South Korea’s FSC And The Crypto Market
The FSC stated that there’s a need to be careful before allowing local companies to enter crypto. However, the agency also says it would support whatever South Korea’s authorities decide regarding this issue.
The commission added that it is ready to promote the use of technology once given the order. But it is also interested in protecting crypto investors and traders. The FSC also plans on reversing its ban that stops banks and financial institutions from allowing crypto transactions.
However, the commission is not ready to release new rules and regulations. Instead, it will use the existing laws. Many consider South Korea a crypto-savvy nation because of the vast involvement of its younger generation in the crypto market. In addition, many big electronic companies have their headquarters in South Korea, and these companies are also interested in the cryptocurrency world.
South Korean Investors Have High-Risk Appetite
According to multiple reports, South Korean crypto investors have a bigger risk appetite than other countries. As a result, they don’t mind investing in other crypto tokens even though these tokens are more subject to risk and volatility.
Also, recent data by the on-chain analytics platform, Santiment, states that Bitcoin and Ether make up about 26% of their crypto portfolios. Ripple (XRP) is the second most common crypto in the country, making up 12.5% of their holdings. In addition, other crypto tokens like Cardano, Solana, and Dogecoin have a notable presence in the country.