South Korea Enters the Crypto Regulation Arena

South Korea Aims to Strengthen Consumer Protection in Crypto Domain

Currently many countries are introducing regulations to regulate cryptocurrencies. Following this trend South Korea has recently released guidelines to exert control over cryptocurrency exchanges operating within the country. The primary objective behind these guidelines is to enhance consumer protection in the realm of cryptocurrencies. As, per the guidelines exchanges will be obligated to maintain a minimum reserve of 3 billion won ($2.3 million).

To ensure that cryptocurrency exchanges are well prepared for any challenges or obligations the South Korean government has established guidelines. According to these guidelines exchanges must allocate a reserved amount to least 30% of their daily average deposit or a minimum of 3 billion won. Additionally there is a limit of 20 billion won for reserves. The government believes that implementing these measures will not safeguard consumer interests but also promote growth, within the country's crypto industry. These guidelines will be effective starting from September and exchanges such, as Upbit and Bithumb are currently making arrangements to meet these requirements.

Furthermore, in June, South Korea's legislative body approved new laws aimed at enhancing the security of cryptocurrency investors. The Financial Services Commission and the Bank of Korea jointly introduced 19 separate bills related to digital assets, including regulations for cryptocurrency businesses and digital assets.

Regulating Cryptocurrencies become Global Trend

Due to increasing crimes and lack of regulations in the crypto space, the investment landscape is currently perceived as not entirely secure for investors. Any incidents in the industry ultimately affect users who end up paying the price. In response to this issue, various countries are introducing new rules and guidelines to regulate the crypto space. Recently, the Biden administration in the U.S. released new crypto reporting guidelines. Furthermore, India has also urged all G-20 nations to come together for a global crypto regulatory framework. India believes that a regulatory framework at the global level is essential to effectively regulate the crypto industry.

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