South Korea to implement virtual asset act, regulator to meet Gary Gensler in US

The South Korean Financial Services Commission will implement the Virtual Asset User Protection Act starting July 19.

According to local media reports, market manipulation, illegal trading, and the use of undisclosed important information about virtual assets are prohibited according to the enforcement decree and supervisory regulations.

In addition, starting from the second half of the year, if the amount of illegal profit exceeds 5 billion won, a maximum penalty of life imprisonment may be imposed. Fines may be set after the Financial Services Commission has notified the Attorney General of the charges.

Business operators such as virtual asset exchanges must manage deposits left by virtual asset users to buy and sell virtual assets through banks. Business operators of virtual assets must also securely store more than 80% of the economic value of users’ virtual assets separately from the Internet.

South Korea’s chief financial regulator, the Financial Supervisory Service (FSS), sought advice from the U.S. Securities and Exchange Commission (SEC). Lee Bokhyun, head of FSS, presented a business plan for 2024. Among other things, it includes a visit to New York. During the trip, Lee plans to meet with SEC Chairman Gary Gensler.

In recent months, the regulator has been actively taking steps to tighten crypto industry regulation. For example, Seoul plans to create two special bureaus to supervise the crypto market.

In mid-December, the FSC also published a legislative notice with the provisions of the cryptocurrency law, which is expected this summer. Several requirements were presented to crypto platforms.