South Korea has unveiled a formidable law aimed at the constant surveillance of approximately 600 cryptocurrency tokens, as reported by the Korean Times. Set to take effect on July 19, this virtual asset user protection law introduces stringent criminal penalties and substantial fines for non-compliance. Offenders may face a minimum of one year in prison or fines ranging from three to five times the illicit gains.

Under this new regulation, the 29 registered crypto exchanges in South Korea are mandated to undertake meticulous reviews of the 600 tokens listed on their platforms. Exchanges are required to adhere to more stringent listing guidelines and re-evaluate the listed tokens biannually to ensure they meet the updated criteria. Following the initial review, exchanges must conduct maintenance assessments every three months.

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In early February, the South Korean government issued an update to the Virtual Asset Users Protection Act. By April, the Financial Services Commission (FSC) indicated impending stricter regulations for listing new tokens on crypto exchanges.

The commission proposed measures to enhance market oversight and security, such as banning the listing of tokens from compromised projects. These new standards aim to prevent tokens from projects with unresolved security issues from being listed on local exchanges.

FSC Developing Additional Crypto Guidelines

The FSC is also crafting new regulatory guidelines for crypto transactions, anticipated to coincide with the user protection law next month. In an effort to streamline policy-making for the cryptocurrency sector, the financial authorities are restructuring their organizational framework. The FSC plans to establish a dedicated bureau for virtual assets, tasked with overseeing the comprehensive regulatory framework of the industry. A proposal for this new bureau will be introduced on June 17 and reviewed by June 18.