In an important step towards enhancing the security of the cryptocurrency market, the Virtual Asset User Protection Act came into effect in South Korea in July 2024. This law aims to protect investors and ensure transparency in transactions.

✅ Key Features of the Law:

Asset Segregation: Trading platforms must store 80% of user deposits in cold wallets and separate user funds from platform funds.

Risk Insurance: Platforms are required to provide insurance or create reserve funds to address security incidents or financial crises.

Compliance with Standards: Implementation of Anti-Money Laundering (AML) procedures and Know Your Customer (KYC) verification to ensure market integrity.

Oversight and Accountability: Regulatory bodies are granted extensive powers to monitor platforms and impose penalties on violators.

🌐 Future Trends:

South Korea plans to regulate cross-border transactions of virtual assets starting from the second half of 2025, with registration and monthly reporting requirements for the concerned companies.

These steps demonstrate South Korea's commitment to providing a safe and transparent trading environment, thereby enhancing investors' confidence in the digital market.