South Korea’s Act on the Protection of Virtual Asset Users went into effect on July 19, 2024, aiming to protect users and ensure market stability. Initially revised in 2021 to mandate virtual asset service providers (VASPs) to register and adhere to anti-money laundering regulations, it became evident that further measures were necessary to combat unfair trading and protect users. Enacted in July 2023, the act includes provisions for safeguarding user deposits, regulating unfair trading, and granting financial authorities the power to oversee and sanction VASPs. Key measures require VASPs to keep user assets separate, insure against liabilities, and report suspicious transactions. The FSC and FSS have prepared for implementation through subordinate regulations, consultations, and pilot tests. Despite the new protections, users are advised to remain cautious due to the inherent risks and volatility of virtual assets and to report suspicious activities to the authorities.
New Virtual Asset Protection Act Takes Effect in South Korea
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