South Korea’s first crypto regulatory framework, the Virtual Asset User Protection Act, is now fully live, imposing strict regulations on crypto exchanges to enhance user protection and market integrity.
Points
- Crypto exchanges must keep 80% of user deposits in cold storage.
- Real-time monitoring and reporting of irregular trading activities are mandatory.
- The law aims to enhance user protection and market integrity.
South Korea has implemented its first comprehensive crypto regulatory framework, the Virtual Asset User Protection Act, after a year-long grace period. This landmark law aims to enhance user protection and market integrity in the rapidly evolving cryptocurrency industry.
Cold Storage Requirement: One of the key regulations mandates that crypto exchanges must keep 80% of user deposits in cold storage. This measure significantly reduces the risk of hacks and ensures the security of user funds.
Real-Time Monitoring: The act also requires real-time monitoring and reporting of irregular trading activities. This provision aims to prevent market manipulation and ensure fair trading practices, enhancing overall market integrity.
User Protection: By imposing these stringent requirements, the Virtual Asset User Protection Act seeks to protect users from potential risks associated with cryptocurrency trading. The law underscores South Korea’s commitment to creating a secure and transparent crypto market.
Explanation
- Cold Storage: Keeping 80% of user deposits in cold storage is a crucial security measure that protects against hacks and unauthorized access.
- Monitoring and Reporting: Real-time monitoring and reporting help prevent market manipulation and ensure fair trading practices.
- User Protection: The new regulations demonstrate South Korea’s dedication to safeguarding crypto investors and maintaining market integrity.