🌎 South Korean Financial Services Commission to Implement Virtual Asset User Protection Act

The South Korean Financial Services Commission is set to implement the Virtual Asset User Protection Act on July 19, as reported by local media outlets. The act aims to crack down on market manipulation, illegal trading, and the use of undisclosed important information related to virtual assets.

Under the enforcement decree and supervisory regulations, business operators like virtual asset exchanges will be required to manage user deposits through banks. Additionally, they must securely store over 80% of the economic value of users’ virtual assets separately from the Internet.

Furthermore, the act introduces strict penalties for violations. If the amount of illegal profit exceeds 5 billion won, offenders may face a maximum penalty of life imprisonment. Fines will be imposed after the Financial Services Commission notifies the Attorney General of the charges.

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In a bid to strengthen regulations in the cryptocurrency industry, South Korea’s Financial Supervisory Service (FSS) sought advice from the U.S. Securities and Exchange Commission (SEC). The head of FSS, Lee Bokhyun, presented a business plan for 2024, which includes a visit to New York to meet with SEC Chairman Gary Gensler.

The FSC has been actively working to tighten regulations in recent months, with plans to create two special bureaus to oversee the crypto market. In December, the FSC published a legislative notice outlining provisions of the upcoming cryptocurrency law expected to be implemented this summer, including requirements for crypto platforms.