On Friday, the South Korean National Assembly approved the Virtual Asset User Protection Law, which is the first step taken by the country to establish a legal framework for virtual assets.
South Korean Crypto Law Approved
The law, which will come into effect next year, has been formulated by combining 19 different proposals. This law defines digital assets and establishes penalties for fraudulent transactions. Additionally, service providers are required to segregate user assets, have insurance coverage, keep certain reserves in cold wallets, and maintain records of all transactions. These regulations aim to ensure the security of users and the protection of their assets. The implementation of the law is aimed at creating a more transparent, reliable, and regulated environment in the cryptocurrency industry in South Korean Crypto.
South Korean Crypto law grants the Financial Services Commission the authority to supervise and oversee service providers. Furthermore, the Bank of Korea has the right to request data from these service providers. Recently, virtual assets have come under increased scrutiny in the country, following an investigation into cryptocurrency assets and the collapse of Terraform Labs last year.
With this law, the South Korean government demonstrates its determination to regulate and supervise the virtual asset sector more rigorously. The Financial Services Commission will operate more effectively to monitor service providers, enhance transparency, and ensure the security of users. The rise in popularity of crypto assets and the rapid developments in this field have necessitated South Korea to take more comprehensive measures to address the potential risks associated with virtual assets and protect users. Local authorities believe that stricter regulations and oversight will contribute to the stability and reliability of the virtual asset ecosystem.
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