🇰🇷 South Korea approves crypto bill for user protection

The National Assembly of South Korea has passed the Virtual Asset User Protection Act, marking a significant step towards establishing a legal framework for virtual assets in the country. The legislation, compiled from 19 proposals by lawmakers, defines digital assets and imposes penalties for unfair transactions. Service providers will be required to segregate user assets, maintain insurance, hold reserves in cold wallets, and keep records of all transactions.

The bill grants authority to the Financial Services Commission to supervise and inspect service providers, while the Bank of Korea can request data from them. This legislation represents South Korea's initial move towards a comprehensive legal structure for digital assets. It will go into effect next year, and it comes as a response to increased scrutiny following investigations into domestic legislators' crypto holdings and the collapse of Terraform Labs last year.

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