South Korea will implement a comprehensive law to protect virtual asset users by July 19. The Financial Service Commission (FSC), the nation’s financial regulator, has instructed 29 registered crypto exchanges, including major players such as Upbit, Bithumb, Coinone, Korbit, and Gopax, to regularly review the tokens listed on their platforms.
Stricter Guidelines and Regular Evaluations
The new legislation requires crypto exchanges to adhere to stringent review guidelines for token listings. This includes conducting an initial review of over 600 crypto tokens currently listed, followed by maintenance reviews every six months to ensure continued compliance. Additionally, ongoing reviews must be performed every three months.
The law imposes severe penalties for non-compliance, including jail sentences of more than one year and fines amounting to three to five times the illegal profits. This move is part of South Korea’s broader effort to enhance market integrity and protect investors from fraudulent activities and insecure projects.
Updated Virtual Asset User Protection Act
The Virtual Asset User Protection Act, updated in early February, forms the backbone of this regulatory shift. In April, the FSC hinted at forthcoming stricter guidelines for token listings, emphasizing the need for enhanced market monitoring and security measures. Specifically, the new standards are expected to prevent the listing of tokens from projects with unresolved security issues or those compromised by breaches.
FSC’s Future Regulatory Plans
In addition to the new law, the FSC is working on further regulatory guidelines for crypto transactions, which are likely to be implemented alongside the user protection measures in July. The FSC is also reorganizing its structure to better manage the cryptocurrency sector. This includes the creation of a dedicated bureau focused exclusively on virtual assets, tasked with overseeing the industry’s entire regulatory framework. A proposal for this new bureau is set to be introduced on June 17 and reviewed by June 18.
These initiatives underscore South Korea’s commitment to establishing a secure and transparent crypto market, ensuring robust protection for investors and maintaining the integrity of the financial system.
