South Korean Lawmaker Proposes Amendment to Protect Virtual Asset Users
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 in order to enhance the safety and security of users in the country’s virtual asset market. The proposed amendment aims to promote transparency and accountability within the rapidly expanding digital asset industry in South Korea.
With the crypto market gaining momentum in South Korea and more financial institutions venturing into the digital asset space, there is a pressing need to establish better communication channels between virtual asset service providers (VASPs) and the Financial Services Commission (FSC). The proposed amendment mandates that VASPs promptly report any incidents that could potentially disrupt their services, such as hacking attacks or system failures. Additionally, these providers are required to keep their websites updated to inform users about any issues, ensuring transparency and building trust among customers during security breaches or service disruptions.
The legislative process for the proposed amendments is currently underway, with the Ministry of Economy and Finance, led by Choi Sang-mok, reviewing the proposed changes. If approved, the amendments could come into effect as early as 2025, pending legislative approval. Despite the growth of the virtual asset market in South Korea, regulatory loopholes and concerns regarding potential misuse within the sector remain key challenges that need to be addressed.
In light of the increasing scrutiny and regulatory efforts in South Korea, financial authorities have observed a surge in suspicious transactions, with the Financial Intelligence Unit (FIU) reporting a 48.8% increase in such activities over the past year. This spike in suspicious transactions has prompted discussions within the Ministry of Economy and Finance about introducing new definitions for virtual assets and their merchants prior to the full implementation of the proposed amendments.
While current regulations in South Korea prohibit companies from owning virtual assets, the country is moving towards regulatory changes that may allow such ownership in the future. 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 of this trend.
It is important to note that the information provided in this article is for educational and informational purposes only and does not constitute financial advice. Readers are encouraged to exercise caution and conduct thorough research before making any decisions related to virtual assets. Coin Edition does not take responsibility for any losses incurred due to the use of the content, products, or services mentioned.