outh Korea seeks to protect the interest of its users in cryptocurrency adoption as new regulations to safeguard the behavior and activities of crypto exchanges have been enforced.
Insights on South Korea’s Newly Enforced Law
The Financial Services Commission (FSC), a South Korean government’s top financial regulator, has enforced new laws that will protect the interest of all users who will be buying and storing their digital assets with the Virtual Asset Service Providers (VASPs), that went into effect on 19th July 2024.
The newly implemented law, known as the Virtual Asset User Protection Act, is designed to enhance the protection of users in crypto. The new law focuses on securing insurance to protect the user against hacking and malicious attacks on their crypto assets, ensuring that users' crypto assets are held in a separate wallet from that used by the exchange, while also imposing that all user's funds deposited are kept in banks.
The implementation of VASPs also addresses cases of money laundering, as crypto exchanges are expected to be diligent and make reports on any transactions that look questionable to the Financial Services Commission (FSC).
Reaction from Crypto Exchanges
Many crypto exchanges in South Korea are not very pleased with the new development, as they now look forward to delisting the majority of digital assets they operate.
Cointelegraph claimed that mass delisting is unlikely to happen given that 20 South Korean exchanges will be conducting a review on a combined 1,333 digital assets for the next six months.
