The Financial Services Commission of Korea (FSC) has issued a notice highlighting the obligation for digital asset investors to receive interest on exchange deposits until July 2024. Notably, the guidance excludes non-fungible tokens (NFTs) and central bank digital currencies (CBDCs). ) in this regulation.
The FSC plans to issue legislative guidance on December 10, but NFTs and CBDCs appear to be outside the scope of this guidance. However, there are exceptions. Tokens that are classified as NFTs but function as a means of payment and are issued in large quantities may fall under the virtual asset classification and earn interest when deposited on an exchange.
In addition to asset classification, the regulator outlined protocols for virtual asset operators to handle user deposits. Exchanges have an obligation to separate user deposits from their own assets and entrust them to the bank. Additionally, the guidelines state that 80% of your coins should be stored in a secure cold wallet.
Future guidelines include strict requirements to guard against hacking or computer incidents. Virtual asset service providers are obligated to subscribe to insurance or accumulate reserves. The law also prohibits blocking deposits or withdrawals except under compelling circumstances such as court orders or regulatory guidelines.
South Korea has been strengthening its regulatory framework in the cryptocurrency sector. Recent efforts have included urging users to report unlicensed cryptocurrency exchanges operating within their area. This initiative, led by the Digital Asset Exchange Association and Korea Financial Intelligence Unit, aims to strengthen compliance and oversight.
These developments highlight Korea’s commitment to creating a safe environment within the cryptocurrency sector while striving to maintain a balance between regulatory safeguards and technological innovation. Our evolving landscape reflects our proactive stance to mitigate the risks associated with digital assets while maintaining an ecosystem conducive to their lawful use and development.