The Financial Services Commission (FSC) in South Korea has announced new regulations for investors in digital assets. By July 2024, investors must receive interest when depositing funds into an exchange. However, nonfungible tokens (NFTs) and central bank digital currencies (CBDCs) are exempt from this requirement.

The FSC plans to release legislative guidance on this matter, with the possibility of exceptions for NFTs that function as a payment method and are issued in large quantities. In such cases, these assets may be eligible for interest when deposited into exchanges.

In addition to classifying virtual assets, the FSC has also determined the method for handling user deposits for virtual asset operators. Exchanges must separate user deposits and their own assets and entrust them to a bank. Furthermore, 80% of the coins must be kept in a cold wallet.

The new regulations also include requirements for preparing for hacks or other computer incidents. Virtual asset service providers are expected to sign up for insurance or accumulate reserves. The law also prohibits the blocking of deposits or withdrawals unless absolutely necessary and when requested by courts and financial regulators.

South Korea has been strengthening its regulations on the crypto space. Recently, financial regulators in the country urged users to report unlicensed crypto exchanges operating within the region. The Digital Asset Exchange Association (DAXA) and the Financial Intelligence Unit of South Korea are leading this initiative.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	Asia
Countries
Sentiment	neutral
Relevance Score	1
People	None
Companies	Digital Asset Exchange Association (DAXA), Financial Intelligence Unit of South Korea, NFT trading volume, Financial Services Commission (FSC)
Currencies	None
Securities	None