In an effort to ensure the stability and security of the cryptocurrency market, authorities in South Korea have recently mandated that all cryptocurrency platforms maintain reserves. This move is aimed at preventing potential liquidity risks and protecting investors’ interests. The new regulations are expected to foster a safer trading environment in the country’s crypto industry.
Title 1: Crypto Exchange Platforms in South Korea Required to Maintain Reserves with Korean Banks
In a move to protect investors venturing into the world of digital tokens, relevant authorities in South Korea have instructed crypto exchange platforms to maintain reserves with Korean banks. Starting from September 2023, these platforms are required to hold a reserve of $2.3 million, equivalent to 3 billion won. Upbit and Bithumb, two prominent ventures in the country, have acknowledged the instructions and committed to compliance.
Title 2: South Korea Strengthening Regulations to Safeguard Crypto Investors
South Korea is taking significant steps to support the cryptocurrency industry and safeguard the interests of its customers. As part of the Virtual Asset Real-Name Account Operation Guidelines, crypto exchange platforms will have the option to maintain 30% of their daily deposits in reserves or hold a fixed amount of $2.3 million. The objective of this regulation is to create a reservoir that can be tapped into during unforeseen circumstances.
The accumulation of reserves is an exception to the guidelines, which will mostly go into effect from January 2024. With these regulations, the Bank of Korea and the Financial Service Commission will have the power to oversee crypto operators and asset custodians. Non-compliance may result in penalties, especially in cases of unfair trading practices.
South Korea aims to establish itself as a global hub for cryptocurrencies and Web3 technologies. Its proactive approach in protecting customer interests sets it apart from other countries competing in the crypto space. While some may prioritize being the first to reach the finish line, South Korea values the integrity and genuine trading practices of ventures like Upbit and Bithumb.
From next year, domestic companies will be required to disclose their cryptocurrency holdings, further enhancing transparency in the industry. Additionally, crypto ventures will need to implement an enhanced version of the Know Your Customer (KYC) mechanism to ensure secure collection transfers.
Although the reserve accumulation requirement begins in September 2023, the majority of the guidelines will take effect in January 2024. Despite the regulatory changes, crypto ventures are fully committed to complying with the instructions issued by the authorities. South Korea’s dedication to investor protection and industry development is evident through these actions.