New Crypto Exchange Reserve Guidelines for Operators in South Korea
The Korea Federation of Banks will soon mandate that South Korean cryptocurrency exchanges with real-name accounts hold a minimum reserve fund of at least 3 billion won (approximately $2.26 million). This new reserve requirement aims to protect users in case of unforeseen issues such as hacking or system failures. Exchanges that support transactions between the Korean won and cryptocurrencies will have to comply with the new rules starting in September.
Key Points:
– Exchanges must hold reserves ranging from 3 billion to 20 billion won (around $2.2-$15 million).
– Exchanges must maintain either 30% of their daily average deposits or at least $2 million in reserve, whichever is greater.
– Stronger Know Your Customer (KYC) norms and rules for fund transfers will also be enforced.
– All policies, except for the reserve requirement, will be implemented by January 2024.
– Top exchanges like Upbit and Bithumb are ready to comply with the new guidelines, but coin-only exchanges are struggling due to a lack of capital.
South Korea’s move to regulate the virtual asset market and establish safeguards for crypto traders and users is another step towards finding a balance between innovation and investor safety. While Western countries are still grappling with establishing a bipartisan framework for regulating digital assets, South Korea is taking proactive measures to protect investors and tackle illegal activities in the sector.
Hot Take
South Korea’s introduction of new reserve guidelines for cryptocurrency exchanges is a positive step towards protecting users and ensuring the stability of the crypto market. By mandating minimum reserve funds, the country is addressing concerns related to hacking and system failures. However, the challenges faced by smaller coin-only exchanges in meeting these requirements highlight the need for support and capital infusion in the crypto industry. Overall, South Korea’s proactive approach to regulating the virtual asset market sets an example for other countries to follow in establishing clear frameworks for crypto exchanges.
By
By
By