South Korea Takes Preemptive Measures: Enhanced Regulations Bolster Security of Crypto Exchanges

Crypto News– Reports from South Korean media outlet News 1 reveal that the upcoming directives focus on the issuance of real-name bank accounts, in line with the criteria previously outlined by the Federation of Korean Banks.

South Korea Takes Preemptive Measures: Enhanced Regulations Bolster Security of Crypto Exchanges

The freshly introduced regulations mandate cryptocurrency exchanges with real-name accounts to establish a reserve fund ranging from a minimum of 3 billion won to a maximum of 20 billion won, with effect from September. This reserve will function as a safeguard against potential user losses.

As per these guidelines, exchanges are required to accumulate 30 percent of their average daily deposits or 3 billion won, whichever amount is higher. Notably, if the calculated 30 percent surpasses 20 billion won, exchanges are allowed to gather funds up to that upper limit.

The operational directives provided by the banks also encompass enhanced user authentication processes, including robust Know Your Customer (KYC) protocols and supplementary fund transfer verifications.

Originally slated for implementation in January 2024, the proactive adoption of the “reserve accumulation” prerequisite in September signifies a cooperative approach taken by both regulatory authorities and exchanges.

The decision to accelerate the rollout of these directives stems from exchanges without real-name accounts demanding clear-cut standards for their issuance. These regulations further address user safety concerns, reinforcing a more secure trading environment.

Earlier, in July, the Federation of Korean Banks introduced operational guidelines for real-name accounts in the virtual asset realm, mandating a 3 billion won reserve for transactions. These impending regulations underscore South Korea’s commitment to cultivating a cryptocurrency landscape that is both secure and transparent.