- FSC released a notice regarding the necessity of compensating customer losses by crypto exchanges.
- The Conservative Party had already initiated the procedures for securing customer funds.
- The proposal included the need to separate customer deposits and operational funds as well as the necessity of creating user records.
It had been reported that the Financial Service Commission (FSC) of South Korea issued a notice regarding the necessity of digital asset exchanges to compensate the customers’ losses and to pay penalties for the sudden suspension of withdrawals.
The consent of FSC was in response to the Digital Asset Basic Act proposed by the Conservative Party that was initially supposed to be implemented by 2023.
Previously, on November 1, FSC initiated the procedures to safeguard crypto investors. However, it had been mentioned in the proposal that as introducing a new wider security framework in the crypto space needs more time, the system would be implemented completely by the next year.
Kim Joo-hyun, the Chairman of FSC, while commenting on the advantages of the Digital Asset Basic Act, told:
“In cooperation with the National Assembly, we will actively support the establishment of a regulatory system for virtual assets that balances innovation through new technologies such as blockchain, consumer protection, and financial stability”.
Currently, the proposal necessitates the exchanges to have a separation in the user deposits and their operational funds. Also, the platforms were asked to prepare a register for the users’ digital asset properties.
So far, there are more than ten proposals on the different aspects of crypto that lay untouched by the South Korean authority.
However, with the release of the current report, it had been clear that the FSC had taken relevant steps to secure crypt customers and thereby facilitate the smooth functioning of the industry.
Furthermore, FSC would be given the complete authority to interfere and seize the crypto firms that violate any of the terms of conduct issued by the officials.