#SouthKoreaCryptoPolicy

The crypto policy of South Korea focuses on establishing a comprehensive regulatory framework for digital assets. Here are the key aspects

# Regulatory Framework

- The Financial Services Commission (FSC) is the primary regulatory body responsible for policy formulation and oversight of Virtual Asset Service Providers (VASP).

- The Financial Intelligence Unit of Korea (KoFIU) receives Suspicious Transaction Reports (STR) from financial institutions and analyzes them.

# Requirements for VASP

- *Registration*: VASP must register with KoFIU before starting business operations.

- *Anti-Money Laundering (AML)*: VASP must comply with AML regulations, including:

- *Customer Due Diligence*: Conduct risk assessments and verify customer identities.

- *Transaction Monitoring*: Monitor transactions for suspicious activities.

- *Reporting*: Report suspicious transactions to KoFIU.

- *Security Measures*: VASP must implement robust security measures, including:

- *Information Security Management System (ISMS)*: Implement an ISMS to protect client assets.

- *Insurance*: Have an insurance plan or set aside reserves to cover potential losses.

# Protection of Virtual Assets

- *Asset Segregation*: VASP must separate client assets from their own assets.

- *Cold Wallet Storage*: VASP must hold a certain proportion of virtual assets in cold wallets.

# Unfair Commercial Practices

- *Prohibited Activities*: VASP are prohibited from engaging in unfair commercial practices.