South Korea Brings New Legal Obligations to Cryptocurrency Exchanges!

South Korean cryptocurrency exchanges will be required to create minimum reserves of at least 3 billion won ($2.3 million) in their bank accounts from September.

South Korean Crypto Exchanges Need To Allocate $2.3M In Reserves From September

The move is seen as part of the country’s efforts to improve consumer protection measures in the rapidly growing cryptocurrency sector.

South Korea’s leading crypto exchanges, including Upbit and Bithumb, are reportedly aligning their operations with new guidelines set by the Korean Banks Federation.

Titled “Virtual Asset Real Name Account Operating Guidelines,” these guidelines were published in July and set out the requirement for crypto exchanges to maintain reserves equal to at least 30% of their average daily deposits and capped at 20 billion won.

This measure aims to ensure that exchanges are able to fulfill their obligations to users in case of possible risks or losses.

Regulatory changes in South Korea are driven by the need to protect crypto investors and promote transparency in the industry.

In June, the country’s legislators passed a comprehensive piece of legislation consisting of 19 crypto-related bills that gave regulatory powers to institutions such as the Financial Services Commission (FSC) and the Bank of Korea.

These entities will oversee crypto operators and asset custodians and have the power to penalize unfair trading practices related to virtual assets.

The implementation of these measures demonstrates South Korea’s commitment to developing a healthy and responsible crypto ecosystem while protecting the interests of both investors and market participants.

*Not investment advice.