Starting in September, South Korean cryptocurrency exchanges will be obligated to maintain a minimum of 3 billion won (equivalent to $2.3 million) in reserves held within bank accounts, as part of a heightened effort to enhance safeguards for consumers in the emerging cryptocurrency sector.
Prominent South Korean crypto platforms like Upbit and Bithumb are well underway to adhere to the fresh obligations outlined in guidelines released by the Korea Federation of Banks back in July, according to a report by local media outlet News1.
These directives, referred to as the “Guidelines for Real-Name Account Operations of Virtual Assets,” entail that crypto exchanges should allocate a reserve of at least 3 billion won or 30% of their average daily deposits, with the intention of meeting their potential liabilities toward users in the event of unforeseen risks.
There’s a ceiling on the size of these reserve funds, capped at 20 billion won, as stipulated by the guidelines.
It is worth noting that South Korea’s legislative landscape for cryptocurrencies saw significant developments in June when lawmakers ratified a package of 19 bills aimed at enhancing protections for crypto investors. These new laws grant regulatory authority to the Financial Services Commission and the Bank of Korea over crypto operators and asset custodians.
The legislation also empowers authorities to impose penalties in cases involving unfair trading of virtual assets.
In a move to further bolster transparency and accountability, the Financial Services Commission announced plans to mandate domestic firms to disclose their cryptocurrency holdings starting from the following year.
These changes are part of updated accounting regulations that will require crypto issuers to reveal not only their token specifics but also business models and internal accounting procedures.