South Korea Rolls Out Landmark Crypto Regulation, the Virtual Asset User Protection Act (VAUPA), to Protect Investors

The law mandates strict security measures for crypto exchanges, including cold wallet storage and insurance. This new framework aims to enhance market integrity and protect investors.

Breaking: South Korea has rolled out its first comprehensive cryptocurrency regulatory framework, known as the Virtual Asset User Protection Act (VAUPA), following the Terra-Luna and FTX collapses.

This landmark legislation mandates strict security measures for local crypto exchanges, including storing at least 80% of user deposits in cold wallets and maintaining insurance or reserve funds to handle potential hacks or liquidity crises.

Moreover, exchanges are obliged to monitor for abnormal trading activities and report them to the Financial Services Commission (FSC), which will oversee operations with a 24-hour surveillance network. Non-compliance could trigger penalties or suspension.

This marks South Korea's first all-encompassing regulation for the virtual asset sector, paving the way for enhanced market integrity and investor protection.

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