Republic of Korea: Implemented Enforcement Decree on the Act on the Protection of Virtual Asset Users

On 19 July 2024, the Enforcement Decree on the Act on the Protection of Virtual Asset Users enters into force. The Act on the Protection of Virtual Asset Users was enacted on 18 July 2023 and aims to safeguard virtual asset users and establish a stable market order. In particular, the Act defines virtual assets and obligates the establishment of an advisory committee. Furthermore, the Act states that virtual asset service providers must manage customer deposits in credible financial institutions, store over 80% of users' assets in cold wallets, and monitor and report suspicious trading activities, with strict standards for what constitutes nonpublic information. Furthermore, the Act introduces penalties, including fines and imprisonment, imposed based on the amount of unfairly gained profits. The Enforcement Decree ensures better protection for user deposits and virtual assets, aiming to create a safer market environment.