South Korea will implement the law on virtual asset user protection by July 19.

The South Korean Financial Service Commission (FSC) has mandated that 29 registered cryptocurrency exchanges, including major platforms like Upbit, Bithumb, Coinone, Korbit, and Gopax, must regularly evaluate the tokens listed on their exchanges. This initiative is part of a broader move to enhance the regulation of the crypto market and protect virtual asset users.

Key Points of the New Regulations:

Law on Virtual Asset User Protection
South Korea will implement a law on virtual asset user protection starting July 19. The law aims to enhance the security and reliability of the cryptocurrency market by imposing stringent review processes and significant penalties for violations.

Key Provisions:
- Criminal Punishments and Fines: Violations will result in a fixed-term jail sentence of more than one year or a fine of three to five times the amount of illegal profits.
- Token Review Requirements: All registered crypto exchanges must review the over 600 crypto tokens listed on them. Initial reviews are to be conducted within a specified timeframe, followed by maintenance reviews every three months to ensure compliance with the new guidelines.

Stricter Token Listing Guidelines
Exchanges must follow stricter guidelines for listing new tokens and re-evaluate existing tokens every six months. These guidelines aim to prevent the listing of tokens from projects with security breaches or unresolved security issues.

Implications for Exchanges:
- Enhanced Due Diligence: Exchanges will need to implement more rigorous due diligence processes for listing and maintaining tokens.
- Regular Reviews: Continuous review cycles will ensure that tokens remain compliant with the regulatory standards, promoting a safer trading environment for users.

Organizational Changes and New Guidelines:
The FSC is also working on additional regulatory guidelines for crypto transactions on exchanges, expected to come into effect alongside the user protection law in July.

Organizational Adjustments:
- New Bureau for Virtual Assets: The FSC plans to establish a dedicated bureau focused on virtual assets, which will manage the regulatory framework for the cryptocurrency sector. This proposal is set to be introduced and reviewed by mid-June.

Goals:
- Improved Market Monitoring: Strengthening the oversight of token listings and crypto transactions.
- Enhanced Security Measures: Preventing compromised projects from listing tokens on local exchanges.

Conclusion
The FSC's new regulations represent a significant step towards tightening the oversight of the cryptocurrency market in South Korea. By enforcing rigorous review standards and establishing a dedicated regulatory body, the South Korean government aims to enhance user protection, reduce illegal activities, and foster a more secure and trustworthy crypto trading environment. These measures are expected to bring greater stability and confidence to the rapidly evolving digital asset market.