South Korean Lawmaker Proposes Amendment to Protect Users of Virtual Assets
A South Korean lawmaker, Kim Hyun-jung from the Democratic Party of Korea (DPK), has put forth a proposal to amend the Virtual Asset User Protection Act. The primary goal of this amendment is to enhance transparency and accountability within South Korea’s rapidly expanding virtual asset market.
The cryptocurrency market in South Korea has been on the rise, attracting the interest of financial institutions venturing into the digital asset space. The proposed amendment aims to facilitate better communication between virtual asset service providers (VASPs) and the Financial Services Commission (FSC).
Under this proposed amendment, VASPs will be required to promptly report any incidents that could potentially disrupt their services, such as hacking or system failures. Additionally, these providers must regularly update their websites to keep users informed about any issues that may arise. This proactive measure is crucial in maintaining user trust during security breaches or service disruptions.
Legislative Process and Expected Timeline
Despite the growth of the virtual asset market in South Korea, regulatory gaps and potential misuse within the sector remain significant challenges. The proposed amendments are currently being reviewed by South Korea’s Ministry of Economy and Finance, led by Choi Sang-mok. If approved, the law could come into effect by 2025.
Increasing Scrutiny and Regulatory Efforts
In addition to the proposed amendment, South Korea’s financial authorities have observed a surge in suspicious transactions. According to the Financial Intelligence Unit (FIU), such transactions have increased by 48.8% in the past year.
To address this rise in suspicious activity, the Ministry of Economy and Finance is considering incorporating new definitions for virtual assets and their merchants before the amendment is fully implemented. While companies in South Korea are currently prohibited from owning virtual assets, the country is moving towards regulatory changes that may permit it. Notably, five major banks have already entered the virtual asset custody market, with Hana Bank’s recent partnership with BitGo serving as a prominent example.
Disclaimer: The information provided in this article is intended for informational and educational purposes only. It does not constitute financial advice or any other form of advice. Coin Edition bears no responsibility for any losses incurred as a result of utilizing the content, products, or services mentioned. Readers are advised to exercise caution before taking any actions related to virtual assets.