This is an AI translated post.
[Virtual Asset User Protection Act Enacted] Upbit and Bithumb, South Korean Exchanges, to Delist Kimchi Coins? (Bitcoin/Ethereum/NFT)
- Writing language: Korean
- •
- Base country: All countries
- •
- Others
Select Language
Summarized by durumis AI
- The Virtual Asset User Protection Act will come into effect on July 19, 2024, and is expected to bring significant changes to the virtual asset market.
- The act includes provisions to protect users' deposits and virtual assets, regulate unfair trading practices such as market manipulation, and strengthen the regulatory and inspection authority of financial authorities.
- Virtual asset businesses are required to comply with user protection obligations, and those who engage in unfair trading practices may face criminal penalties and fines.
Hello, this is SEPOWER!
The rain that was pouring down on the metropolitan area is showing signs of subsiding for a while.
It seems like the coin is also following the weather, taking a temporary pause.
It seems like there's still a long way to go for investor sentiment to recoverㅜㅜ
Recently, we introduced you to the virtual asset tax exemption and the financial investment tax.
The Virtual Asset Utilization Protection Act goes into effect today.
It was enacted on July 18, 2023, and finally goes into effect today, July 19, 2024. Let's talk about what impact it will have on the virtual asset market!
[ South Korea, Virtual Asset User Protection Act Enacted from July 19 ]
◎ Regarding Coin Listing
Listing maintenance review, etc., are introduced after the Virtual Asset User Protection Act
Currently, DAXA is leading the way in establishing listing & delisting regulations, but these are self-regulatory regulations
The Financial Services Commission is expected to provide guidelines
It seems like listing on exchanges will become more stringent. It is necessary to look into coins listed after this.
◎ Regarding MM's Regulation
Market making activities are an exception under the Capital Market Act, but the Virtual Asset User Protection Act does not have any exceptions, so it falls under market manipulation.
-> MM may slow down, leading to a decrease in liquidity
-> Decrease in liquidity could lead to delisting criteria
◎ Is NFT a Virtual Asset?
NFT can be one of Securities OR NFT OR Virtual Asset
If only issued as NFT, it is highly likely to be considered as Securities.
The key is whether it falls under investment contract securities.
General NFTs that we know are considered Virtual Asset
If the type is not traded frequently, it can be considered as NFT.
◎ Getting Your Money Back in Case of Domestic Exchange Bankruptcy
Exchanges now have to entrust funds to banks, etc., making it possible to get your money back.
However, coins are not entrusted, so this part is case by case.
◎ Be Cautious About Using Private Virtual Asset Exchanges as they are Illegal
◎ Additional Information Is Required as the Law Is Still Ambiguous
Full Text of the Virtual Asset User Protection Act
[ Press Release ] The 「Virtual Asset User Protection Act」 will go into effect tomorrow (July 19).
The 「Virtual Asset User Protection Act」 will go into effect tomorrow (July 19). < Key Provisions of the 「Virtual Asset User Protection Act」 > ➊ Safeguarding users' deposits and virtual assets ➋ Establishing investigation and punishment grounds for unfair trading practices in the virtual asset market, such as market manipulation ➌ Defining the Financial Authorities' supervisory, inspection, and sanctioning powers over virtual asset businesses [ Background of the Enactment of the 「Virtual Asset User Protection Act」 ] The 「Virtual Asset User Protection Act」, enacted to establish a sound order in the virtual asset market and protect virtual asset users, will go into effect tomorrow (July 19). In March 2021, the 「Specific Financial Information Act」 was amended, introducing a reporting system for virtual asset businesses and establishing various regulatory measures to prevent money laundering, such as the Travel Rule. However, the regulatory framework centered on money laundering prevention made it difficult to actively respond to various unfair trading practices, such as market manipulation, and there were continued concerns about limitations in protecting users' assets. In light of the importance and urgency of user protection, 19 bills related to virtual assets pending in the National Assembly were integrated and adjusted, focusing on essential elements for user protection, to create an alternative and, through in-depth discussions, the 「Virtual Asset User Protection Act」 was enacted on July 18, 2023. After a year of preparation, including the enactment of subordinate regulations such as enforcement decrees and the preparation for the enforcement of the law by virtual asset businesses, the 「Virtual Asset User Protection Act」 will go into effect tomorrow (July 19).
www.fsc.go.kr
[ Background of the Enactment of the 「Virtual Asset User Protection Act」 ]
The 「Virtual Asset User Protection Act」, enacted to establish a sound order in the virtual asset market and protect virtual asset users, will go into effect tomorrow (July 19).
In March 2021, the 「Specific Financial Information Act」 was amended, introducing a reporting system for virtual asset businesses and establishing various regulatory measures to prevent money laundering, such as the Travel Rule. However, the regulatory framework centered on money laundering prevention made it difficult to actively respond to various unfair trading practices, such as market manipulation, and there were continued concerns about limitations in protecting users' assets.
In light of the importance and urgency of user protection, 19 bills related to virtual assets pending in the National Assembly were integrated and adjusted, focusing on essential elements for user protection, to create an alternative and, through in-depth discussions, the 「Virtual Asset User Protection Act」 was enacted on July 18, 2023. After a year of preparation, including the enactment of subordinate regulations such as enforcement decrees and the preparation for the enforcement of the law by virtual asset businesses, the 「Virtual Asset User Protection Act」 will go into effect tomorrow (July 19).
[ Key Provisions of the 「Virtual Asset User Protection Act」 and Subordinate Regulations ]
The 「Virtual Asset User Protection Act」 stipulates △protection of users' deposits and virtual assets, △regulation of unfair trading practices such as market manipulation, △supervisory, inspection, and sanctioning powers of the Financial Authorities over virtual asset businesses, etc., and investigatory and remedial powers over unfair trading practitioners.
First, users' deposits must be safely held and managed by a reputable management institution, a bank, and virtual asset businesses must pay users a deposit usage fee in the nature of deposit interest. Virtual asset businesses must keep their own virtual assets separate from those of users, and must hold virtual assets of the same type and quantity in substance. To fulfill their responsibilities in the event of an accident such as hacking or computer failure, virtual asset businesses must either take out insurance or set up reserve funds.
A regulatory framework for unfair trading practices such as market manipulation will also be introduced. Virtual asset exchanges must monitor for suspicious transactions on a regular basis, and if they suspect unfair trading practices, they must take measures such as reporting it to the Financial Authorities. * Subsequent investigations by the Financial Authorities into the alleged offenses and investigations by law enforcement agencies will make it possible to impose criminal penalties and fines ** on those who have engaged in unfair trading practices.
The Financial Services Commission and virtual asset exchanges have created "Guidelines for Continuous Monitoring of Suspicious Transactions" (July 5) to ensure that the virtual asset exchanges' market monitoring systems operate smoothly.
** (Criminal Penalties) Imprisonment for at least one year or a fine equivalent to 3 to 5 times the amount of unjust gains.
(Unjust gains of 500 million won: Imprisonment for at least three years, Unjust gains of 5 billion won: Imprisonment for at least five years or life imprisonment)
(Fines) An amount equivalent to twice the unjust gains. If it is difficult to calculate the unjust gains, a fine of up to 4 billion won will be imposed.
With the enforcement of the 「Virtual Asset User Protection Act」, the Financial Authorities will be able to supervise, inspect, and impose sanctions on virtual asset businesses. The Financial Services Commission will inspect virtual asset businesses to check their compliance with the obligations to protect users under the 「Virtual Asset User Protection Act」, and the Financial Services Commission will be able to impose sanctions on virtual asset businesses that violate their obligations, such as a corrective order, suspension of all or part of their business, and imposition of fines.
[ Preparation for the Enforcement of the 「Virtual Asset User Protection Act」 ]
The Financial Authorities have been preparing to ensure the smooth introduction of the new system so that it can be implemented without any problems. The Financial Services Commission has enacted enforcement decrees (approved by the Cabinet Meeting on June 25) and supervisory regulations and investigation regulations (approved by the Financial Services Commission on July 10) to define the specific matters delegated by the law.
In February of this year, the Financial Services Commission provided a roadmap for the enforcement of the law to virtual asset businesses and conducted on-site consulting for businesses that expressed interest. Starting in June, a pilot test of the regulations was conducted to finalize the preparations of the Financial Authorities and virtual asset businesses. Compulsory insurance products covering accidents such as hacking and computer failures have also been launched in time for the enforcement of the law. In addition, 20 virtual asset exchanges and DAXA have established "Best Practices for Virtual Asset Trading Support" as part of self-regulation, which will be implemented along with the 「Virtual Asset User Protection Act」. These best practices provide minimum criteria that virtual asset exchanges must jointly comply with when reviewing virtual asset trading support, and also require the provision of essential information to users, such as the original white paper and Korean translations of the main content.
[ Expected Effects ]
The enforcement of the 「Virtual Asset User Protection Act」 is expected to provide a basic safety net to protect virtual asset users. It will also contribute to establishing market order by making it possible to impose strong penalties on unfair trading practices that disrupt the order of the virtual asset market. In the future, the Financial Services Commission will strengthen cooperation with related agencies, such as law enforcement agencies, to ensure that the 「Virtual Asset User Protection Act」 operates effectively, and if any shortcomings are found after the implementation of the system, it will actively supplement them.
[ Matters for User Attention ]
However, virtual asset users should be aware that the 「Virtual Asset User Protection Act」 does not guarantee the safety of virtual assets, and should carefully consider their investment decisions, taking into account the high risk and volatility of virtual assets and gathering and verifying relevant information on their own. In addition, it is necessary to be cautious about transactions through unidentified businesses, other than virtual asset businesses registered with the Financial Intelligence Unit (FIU) *, and over-the-counter transactions (P2P), as proper market monitoring may not be in place, increasing the risk of losses.
'The Virtual Asset User Protection Act must also inform the public about clear criteria.'
Sepower, a power community, contact ↓