South Korea Takes Initial Step Towards Digital Asset Legal Framework
South Korea Takes First Step with Virtual Asset User Protection Act, Establishing Legal Framework for Virtual Assets.
The recently passed legislation in South Korea, set to take effect next year, is a comprehensive compilation of 19 proposals put forth by lawmakers.
This groundbreaking legislation not only defines digital assets but also establishes penalties for unfair transactions within the virtual asset realm.
Under the new law, service providers are required to adhere to strict regulations such as segregating user assets, obtaining insurance coverage, holding a portion of reserves in cold wallets for enhanced security, and maintaining detailed records of all transactions.
This forward-thinking approach aims to enhance user protection and bolster the overall integrity of the virtual asset ecosystem.
With the passing of the bill, the Financial Services Commission (FSC) in South Korea is granted authoritative powers to oversee and conduct inspections of service providers operating within the virtual asset space. Furthermore, the Bank of Korea is empowered with the right to request essential data from these service providers.
This increased level of scrutiny surrounding virtual assets in the country is a direct response to recent events, including an investigation into the crypto holdings of a domestic lawmaker and the unfortunate collapse of Terraform Labs in the previous year.
By strengthening regulatory oversight and information-gathering capabilities, South Korea aims to restore trust and stability in the virtual asset sector while safeguarding the interests of its citizens.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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