Prior to the amendment, there were no clear laws and regulations regarding crypto asset derivatives. However, due to the amendment of the law, it has been clearly stated that trading in crypto asset derivatives as a business falls under the category of financial instruments business. In relation to this, the following five points are needed to be kept in mind.
In the following sections, the main points regarding these five regulations will be summarized.
A) Registration as a Type 1 financial transaction business is now mandatory.
Until now, there have been no clear laws and regulations regarding crypto asset derivatives. However, due to the amendment of the law, it has been clearly defined that conducting crypto asset derivative transactions as a business is now regarded as a financial transaction business, and registration as a Type 1 financial transaction business is mandatory. In addition, with respect to the "specific business contents" underFinancial Instruments and Exchange Law, for example, when a person who is already registered as a financial instruments business operator intends to handle crypto-asset derivatives transactions, prior notification is required for the name of the new crypto-asset or financial index to be handled.
B) Business management system needs to be strengthened.
Due to the amendment of the law, a business management system is required to ensure that business operations do not fall into a situation that is contrary to the public interest or that may hinder the protection of investors.
Two specific business management systems are listed below.
1. Prevention of unfair acts by customers, such as fraud, spread of rumors, and market manipulation
2. Adequate control system for loss-cutting
C) Methods of displaying advertisements and providing information to customers.