The Virtual Asset User Protection Act was enacted by South Korea’s National Assembly, creating the country’s first legal framework for virtual assets. Based on 19 proposals, the Act defines digital assets and establishes sanctions for improper transactions. Service providers must keep customer assets separate, have insurance, keep reserves in cold wallets, and keep records. The measure empowers the Financial Services Commission to supervise and examine service providers, while the Bank of Korea has the right to seek data from them.
On Monday, Singapore’s Monetary Authority of Singapore (MAS) declared that crypto service providers in the nation would be required to put customer money under a statutory trust for safety by the end of the year. This follows a public consultation on improving customer protection that began in October 2022. The rule is intended to reduce the risk of client asset loss or harm and to simplify asset recovery in the case of a DPT (Digital Payment Token or Cryptocurrency) service provider’s insolvency. The MAS has also prohibited cryptocurrency service providers from assisting ordinary consumers’ lending and staking of tokens, however, institutional and licensed investors can still get the service. The MAS has also requested public input on legislative changes to implement the most recent standards. Singapore’s regulations are similar to those of other payment service providers, although not as strict as those of Hong Kong. As market dynamics and consumer risk awareness change, the MAS will take efforts to ensure that its measures remain balanced and appropriate.