South Korea has implemented a law requiring continuous scrutiny of 600 cryptocurrency tokens
South Korea is preparing to enforce the Virtual Asset User Protection Law, scheduled to take effect by July 19th.
The Financial Services Commission (FSC) of South Korea has issued notifications to 29 registered cryptocurrency exchanges, which include prominent platforms such as Upbit, Bithumb, Coinone, Korbit, and Gopax. These exchanges have been instructed to conduct regular evaluations of the crypto tokens they list and determine whether to continue supporting their trading activities.
South Korea is gearing up to enforce the Virtual Asset User Protection Law, slated to be implemented by July 19. According to a report in the Korean Times, this new legislation introduces stringent criminal penalties and fines for non-compliance. Violations could lead to imprisonment exceeding one year or fines ranging from three to five times the amount of illegal profits. As part of the regulatory overhaul, all 29 registered crypto exchanges will be mandated to conduct thorough reviews of the 600 crypto tokens listed on their platforms.
Under the new law, crypto exchanges must adhere to stricter guidelines for listing tokens and conduct initial reviews every six months to ensure compliance with the updated standards. Additionally, maintenance reviews must be conducted every three months to uphold regulatory standards. Earlier in February, the South Korean government had updated the Virtual Asset Users Protection Act, signaling a more rigorous approach to overseeing the cryptocurrency market. In April, the FSC hinted at further tightening regulatory guidelines for listing new tokens, proposing measures to enhance market surveillance and security, such as restricting tokens associated with compromised projects.
Furthermore, the FSC is actively developing new regulatory frameworks for crypto transactions, expected to coincide with the implementation of the user protection law. Structural changes within financial authorities are also underway to streamline policy-making processes related to the cryptocurrency sector. Specifically, the FSC plans to establish a dedicated bureau focused exclusively on virtual assets, responsible for overseeing the comprehensive regulatory framework governing the industry. A proposal outlining these organizational changes is set to be introduced on June 17 and undergo review by June 18, underscoring South Korea’s commitment to enhancing oversight and security within its cryptocurrency ecosystem.
