South Korea’s top financial regulator, the Financial Services Commission (FSC), has proposed new regulations for crypto assets, specifically targeting non-fungible tokens (NFTs), interest on deposits, and the security of customer assets.
The FSC aims to exclude NFTs from existing regulations that define “virtual assets” like cryptocurrencies. This is because NFTs have unique characteristics and are not easily interchangeable or transferable.
Under the new proposals, Korean banks would be required to pay interest on customer deposits of crypto held by local virtual asset service providers (VASPs). Additionally, VASPs must keep customer deposits in separate bank accounts from their corporate assets.
Addressing the security of customer assets is a key focus of the proposed regulations. VASPs would be required to store at least 80% of customer assets in cold wallets, which are offline and disconnected from the internet. This measure aims to enhance security and protect against hacking and other security breaches.
The FSC is currently seeking public feedback on these proposals as part of its efforts to update the regulatory framework. The aim is to finalize the framework in the first half of 2024. These proposals reflect South Korea’s approach to regulating the crypto industry, with a focus on adapting to emerging categories like NFTs while prioritizing investor protections.
South Korea’s position as one of the world’s leading crypto economies means that regulatory developments in the country often serve as indicators for potential policy directions in other jurisdictions.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Asia |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | None |
| Companies | Virtual Asset Service Providers (VASPs), Financial Services Commission |
| Currencies | None |
| Securities | None |
