Although the Asian country has not yet officially imposed taxes on cryptocurrency profits, the continued indecision over the introduction of levies has created uncertainty.
Starting in July, South Korean cryptocurrency investors They will have greater protection thanks to the approval of new regulations by the Government, intended to improve the security of users in the event of an exchange bankruptcy.
And the Financial Services Commission (FSC) announced in the last few hours that the decree, which will come into force on July 19is part of a broader initiative to regulate the digital asset market in the country. The regulation requires virtual asset service providers to separate customer deposits from their operating fundsensuring that these are held in accredited financial institutions.
With this measure, South Korea seeks to reduce the risks associated with possible exchange insolvencies, thus increasing user confidence in the Korean cryptocurrency market.
Cryptocurrencies: the details of the standard
New safeguards include a requirement for value-added service providers to store at least 80% of users’ digital assets in cold storage systems, known for their greater security against hacking and loss.
Depending on the security prospects of a VASP (Virtual Asset Service Provider), regulators may impose an even higher cold storage requirement to mitigate the risks of fraudulent activities or operational shutdowns.
Hack Virus Malware.jpg
In addition to improving user security, The decree introduces strict sanctions for manipulative and fraudulent practices within the cryptocurrency market. Offenders involved in exploiting the system could face a minimum of one year in prison or fines equivalent to five times the illegal profits made from their activities.
Likewise, the regulations also include provisions for value-added service providers to restrict user deposits and withdrawals under certain conditions, lor that offers greater control over irregular activities.
Recently, South Korea stepped up legal action against scammers who deprive crypto investors of their funds. On May 21, South Korean police arrested 19 members of a fraudulent group on social networkswhich had tricked more than 300 investors into parting with nearly $19 million.
Although South Korea has not yet applied official taxes to cryptocurrency profits, continued indecision over the introduction of such levies has created uncertainty. However, tax authorities are actively monitoring the situation amid concerns that cryptocurrencies are being used to evade taxes.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
