The South Korean Financial Services Commission Implements Virtual Asset User Protection Act
The South Korean Financial Services Commission (FSC) is set to enforce the Virtual Asset User Protection Act from July 19. The act aims to combat market manipulation, illegal trading, and the use of undisclosed important information related to virtual assets.
Stricter Penalties for Violations
The enforcement decree and supervisory regulations introduce stricter penalties for violations. If the amount of illegal profit exceeds 5 billion won, offenders may face a maximum penalty of life imprisonment. Fines will be determined by the Financial Services Commission after notifying the Attorney General of the charges.
Enhanced Security Measures
Virtual asset exchanges and other business operators are required to manage user deposits through banks. Additionally, they must securely store over 80% of users’ virtual assets separately from the Internet, ensuring enhanced security measures.
Seeking Advice from U.S. Securities and Exchange Commission
The Financial Supervisory Service (FSS), South Korea’s chief financial regulator, has sought advice from the U.S. Securities and Exchange Commission (SEC). FSS head Lee Bokhyun plans to visit New York and meet with SEC Chairman Gary Gensler as part of their business plan for 2024.
Continued Efforts in Crypto Regulation
South Korea has been actively taking steps to tighten regulations in the crypto industry. The creation of two special bureaus dedicated to supervising the crypto market is among these efforts. The FSC also published a legislative notice outlining requirements for crypto platforms as part of the upcoming cryptocurrency law.
Hot Take: South Korea Strengthens Virtual Asset Regulation
The implementation of the Virtual Asset User Protection Act in South Korea marks a significant step towards enhancing security and curbing illicit activities in the crypto industry. The new regulations, including stricter penalties and enhanced security measures, aim to protect virtual asset users and foster a more transparent and trustworthy environment for cryptocurrency trading. Seeking advice from international regulators like the U.S. Securities and Exchange Commission further highlights South Korea’s commitment to effective regulation. With continued efforts to tighten crypto regulations and the upcoming cryptocurrency law, South Korea is positioning itself as a key player in shaping the future of the crypto market.
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