Over the past few days several Asian countries have taken significant steps towards establishing clear and enforceable regulatory frameworks to enhance the protection of cryptocurrency users.
🇰🇷 South Korea
On June 30, South Korea’ National Assembly passed the Virtual Asset User Protection Act, which will come into effect next year. This legislation defines digital assets and outlines penalties for unfair transactions. Service providers will be required to hold some reserves in cold wallets, segregate user assets, maintain insurance, and keep records of all transactions. The bill grants authority to the Financial Services Commission to oversee and inspect service providers, and enables the Bank of Korea to request data from them.
On July 3, the Monetary Authority of Singapore (MAS) announced that crypto service providers must deposit customer assets under a statutory trust by the end of the year. This move follows a public consultation initiated in October 2022 aimed at enhancing customer protection. The MAS has also restricted crypto service providers from facilitating lending and staking of tokens for retail customers. However, institutional and accredited investors will still have access to these services.
In Thailand, on July 3, the Securities and Exchange Commission (SEC) issued new rules for digital asset service providers, with a particular focus on investor protection. These guidelines mandate that providers offer sufficient warnings about the risks associated with cryptocurrency trading. Additionally, the new guidelines prohibit service providers from using customers' funds for lending or investment.
These regulatory changes across Asia demonstrate an increasing recognition of the importance of user protection in the rapidly evolving world of digital assets. As the use of cryptocurrencies continues to grow, the need for robust regulatory frameworks becomes increasingly evident.
Learn more about crypto regulation around the world