South Korea Set to Enforce Virtual Asset User Protection Law

The South Korean regulatory body, the Financial Service Commission (FSC), has issued a directive to 29 registered crypto exchanges, including major players like Upbit, Bithumb, Coinone, Korbit, and Gopax. These exchanges must regularly evaluate the tokens on their platforms and decide whether to continue supporting their trading.

South Korea's new law, which aims to protect virtual asset users, will come into effect on July 19. This law imposes significant criminal punishments and fines for violations.

Offenders could face a fixed-term jail sentence of more than one year or a fine ranging from three to five times the amount of illegal profits.

To comply with the new regulations, all 29 registered crypto exchanges must review approximately 600 crypto tokens listed on their platforms.

The law mandates that crypto exchanges adhere to stricter review guidelines for token listings. They must review existing listed tokens every six months to ensure compliance with the new guidelines. After the initial review, exchanges are required to conduct maintenance reviews every three months.

Government Updates and New Guidelines

The South Korean government updated the Virtual Asset Users Protection Act in early February. By April, the FSC had already hinted at stricter regulatory guidelines for listing new tokens on crypto exchanges.

At the time, the commission suggested several steps to improve market monitoring and security, such as prohibiting the listing of tokens from compromised projects.

The new standards will prevent tokens created by projects with security breaches and unresolved security issues from being listed on local exchanges. This move aims to enhance the overall security and integrity of the country's cryptocurrency market.

FSC Working on More Crypto Guidelines

The report also noted that the FSC is working on new regulatory guidelines for crypto transactions. Along with the user protection law, these guidelines are expected to come into force next month. Financial authorities are changing organizational structures to create efficient policies in the cryptocurrency sector.

The FSC plans to establish a new bureau exclusively focused on virtual assets. This bureau will be responsible for managing the industry's entire regulatory framework. A proposal for this new bureau will be introduced on June 17 and reviewed by June 18.

"The FSC's new guidelines will change how crypto exchanges operate in South Korea and are aimed at enhancing security and compliance."

The FSC will monitor crypto exchanges closely to ensure compliance and protect investors from potential risks.