Just-In: South Korea Introduces New Crypto Regulations; Will It Impact Exchanges?

Coingapestaff
July 12, 2023
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Upbit, Coinone, Bithumb Face New Fees Under South Korea's Crypto Law

The Financial Services Commission (FSC), South Korea’s top financial watchdog, has made it mandatory for crypto businesses that issue or own cryptocurrencies to include specific crypto disclosures in their financial statements starting in 2024 to increase market transparency.

Under the new legislation, crypto businesses will be compelled to post details about the quantity, properties, operational strategies, and accounting practices of the sale of virtual currencies, as well as earnings, volume, and market value of their cryptocurrency.

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What Does This Mean for Crypto ?

Following the passage of the Virtual Asset User Protection Act on June 30, the FSC announced its decision on the proposed rules, stating that the goals of the measures are to increase accounting transparency.

The timing and standards for assessing whether the sale of virtual assets to clients constituted profit were previously the subject of disagreement between businesses and their auditors. According to these regulations, if corporations sell virtual assets, the transactions will be recorded as profit following the company’s satisfaction of its holders’ responsibilities.

Authorities in South Korea are certain that the new regulations would increase investor protection and market transparency while fostering the expansion of the nation’s cryptocurrency economy. 

According to the crypto statistics portal Xangle, a good part of the world’s cryptocurrency investors are from South Korea. At the end of 2022, the Korean won ranked third among all currencies used in Bitcoin transactions, after the US dollar and the Japanese yen.

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South Korea And Crypto Regulations

The nation is frequently acknowledged as Asia’s hub for cryptocurrency activities. According to estimates, the Korean market accounts for close to 30% of all cryptocurrency trading activity worldwide.

The Virtual Asset Protection Act, which aims to tighten regulations against market manipulation and restrict insider trading, was approved by South Korea’s parliament late last month. According to the FSC, this rule prompted additional modifications to the accounting procedures for digital assets.

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.