The new framework introduces stringent requirements for Virtual Asset Service Providers (VASPs). This safeguard ensures that in the event of a cryptocurrency exchange going bankrupt, the respective financial institutions would directly repay customer funds. Besides the aforementioned mandates, VASPs are also required to be insured or have a reserve fund in place to mitigate the damage in the event of a hack or liquidity crisis.
Further, the law includes provisions for VASPs to restrict user deposits and withdrawals under certain conditions, offering further control over irregular activities. The regulator claims this system will cover 99.9% of the country’s crypto trading volume. If any abnormalities are identified, they must be reported to the FSS via a dedicated data transmission line.
When the system was introduced in early July, 29 crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, registered with the FSS regarding this. The nation’s ruling party is reportedly considering postponing it to 2028.