South Korea’s first crypto regulatory framework has gone fully live, marking a significant step in the country’s approach to digital assets. Key regulations include stringent requirements for exchanges and real-time monitoring of trading activities.
Points
- South Korea’s first crypto regulatory framework is now fully live.
- Exchanges must keep 80% of user deposits in cold storage.
- The Virtual Asset User Protection Act mandates real-time monitoring and reporting of irregular trading activities.
Introduction
Key Regulations and Requirements
South Korea’s first crypto regulatory framework has gone fully live, after a year of grace period. This marks a significant step in the country’s approach to regulating digital assets and ensuring investor protection. The framework includes several stringent requirements for cryptocurrency exchanges and mandates real-time monitoring of trading activities.
Cold Storage Requirement
One of the key regulations requires crypto exchanges in South Korea to keep 80% of user deposits in cold storage. Cold storage refers to offline wallets that are not connected to the internet, providing a higher level of security against hacking and theft. This measure aims to protect users’ funds and enhance the overall security of the exchanges.
Real-Time Monitoring and Reporting
The Virtual Asset User Protection Act also mandates real-time monitoring and reporting of irregular trading activities. Exchanges are required to implement systems that can detect suspicious transactions and report them to the authorities promptly. This measure is intended to prevent fraud, money laundering, and other illegal activities in the crypto market.
Conclusion
South Korea’s inaugural crypto regulatory framework sets a new standard for digital asset regulation, focusing on security and investor protection. By requiring exchanges to keep a significant portion of user deposits in cold storage and mandating real-time monitoring of trading activities, South Korea
is taking proactive steps to safeguard its crypto market. These regulations are expected to enhance trust and stability in the industry, making South Korea a leading example in the global crypto regulatory landscape.