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South Korea's National Assembly passed the Virtual Asset User Protection Act, taking an important step towards establishing the country's legal framework for virtual assets. By law, service providers are required to keep user assets separate, have insurance, some reserves are stored in cold wallets, and all transactions are recorded.
This law defines digital assets and establishes penalties for unfair business transactions. In addition, the Financial Services Commission is empowered to audit service providers, while the Bank of Korea has the right to request data from these companies.
This arrangement came along with developments regarding an MP's investigations to buy back crypto assets due to the collapse of Terraform Labs. The law will enter into force next year.
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