The South Korean National Assembly passed the Virtual Asset User Protection Act on June 30, marking the country’s first steps towards establishing a legal framework for virtual assets.
This law will take effect on January 1, 2024, and it is a compilation of 19 proposals from lawmakers. It defines virtual assets and establishes penalties for unfair transactions. Service providers are required to segregate users’ assets, have insurance coverage, keep a portion of reserves in cold wallets, and maintain records of all transactions.
In May 2023, the South Korean government and lawmakers reached a consensus on introducing regulations and a legal framework for cryptocurrencies and virtual assets in general in this Asian country.
In an interview, Back Hyeryun, the head of the National Policy Committee of the South Korean National Assembly, stated:
“There are too many issues, so we need to focus on one thing first, which is protecting investors to move forward quickly.”