South Korea’s Financial Services Commission has implemented new regulations aimed at protecting users buying and storing crypto assets with virtual asset service providers (VASPs). The “Virtual Asset User Protection Act” requires VASPs to take measures such as insuring against hacking, keeping customer assets separate, and reporting suspicious transactions to prevent money laundering.
The laws, which came into effect on July 19, have raised concerns among South Korean crypto exchanges. Some fear that the rules could lead to the delisting of a large number of tokens. However, the Digital Asset Exchange Alliance (DAXA) believes that mass delisting is unlikely to occur all at once.
In response to the new regulations, South Korea’s ruling party has proposed delaying the implementation of the country’s tax on crypto trading profits. The party cited deteriorating sentiment towards crypto assets and stated that imposing taxes on virtual assets rapidly may not be advisable at this time.
Overall, the new regulations aim to enhance the security and protection of users’ crypto assets in South Korea. It remains to be seen how the crypto industry in the country will adapt to these changes and whether any further adjustments will be made in the future.