Korea’s regulator has taken its first steps to
shield the country’s burgeoning peer-to-peer (P2P)
loan industry from fraud, but its approach has been criticised
for its leniency.
The country's Financial Reform Committee has set up a
task-force team to draft industry guidelines aimed at
protecting investors from fraud by P2P lenders, following
several high-profile cases in China and the US.
But counsel in Korea argue that setting up guidelines may
not be enough to address the concern surrounding a potential
outbreak of fraud cases in the country’s nascent
"The guidelines will not...resolve the fundamental issues of
the current laws and regulations, as they will not have the
legislatively binding effect of a law,"
Ik Hwan Cho, senior foreign attorney at Kim & Chang in
He added that, while the guidelines could serve as a
temporary measure, addressing the uncertainties surrounding the
industry will ultimately...