South Korea’s Proactive Regulatory Approach
South Korea is taking a proactive approach to regulating the cryptocurrency space. The country’s Financial Services Commission announced the Enforcement of the Virtual Asset User Protection Act, which will take effect in July. These regulations will prohibit market manipulation, illegal trading, and the use of undisclosed important information regarding virtual assets.
Violating these laws can lead to imprisonment, heavy fines, or both, depending on the amount of unfair profits and the severity of the offense.
Stringent Rules for Crypto Exchanges
The regulations also require business owners to store at least 80% of customers’ deposits in cold wallets, enhancing security for users’ digital assets. Additionally, all deposits and withdrawals must be made through banks, and cyber theft insurance policies are mandated by law to compensate for any losses.
Consequences of Non-compliance
Businesses that violate the regulations may face measures such as business suspension, correction orders, complaints, or investigation by the Financial Services Commission. These regulations aim to balance fostering innovation in the digital asset space while ensuring user safety and protecting consumers’ interests.
Hot Take: Striking a Balance
South Korea’s regulatory measures signal a commitment to striking a balance between innovation and user safety in the crypto space. By safeguarding consumer interests and protecting their assets, these regulations aim to build trust in the cryptocurrency industry.
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