South Korean Cryptocurrency Exchanges Required to Set Aside Reserves
South Korean cryptocurrency exchanges will now be required to set aside a minimum of 3 billion won ($2.3 million) in reserves held in bank accounts, starting from September. This measure is being implemented as part of the country’s efforts to enhance consumer protection in the crypto industry. Major Korean exchanges such as Upbit and Bithumb are already on track to comply with these new requirements.
Key Points:
1. Reserves: Exchanges need to set aside at least 3 billion won or 30% of their daily average deposits in reserves to cover potential damages to users during risk events.
2. Cap on Funds: The size of these reserves will be capped at 20 billion won.
3. New Legislation: South Korean lawmakers have recently passed legislation to protect crypto investors, granting regulatory authority to the Financial Services Commission and the Bank of Korea.
4. Accounting Rules: From next year, domestic companies will be required to disclose cryptocurrency holdings as part of new accounting rules.
5. Disclosure Requirements: Crypto issuers will also need to disclose token details, business models, and internal accounting policies.
Hot Take:
The new regulations in South Korea aim to improve consumer protection in the cryptocurrency industry by ensuring that exchanges have sufficient reserves to compensate users in the event of risks. This move reflects the growing recognition of cryptocurrencies as a legitimate asset class that requires regulatory oversight. By setting these requirements, South Korea is taking proactive steps to safeguard investors and promote transparency in the crypto market.
By
By
By
By
By
By