- South Korean regulators clarified crypto interest and exchange requirements, mandating that exchanges pay interest on user deposits by July 2024. NFTs and CBDCs are currently exempt.
- The new interest rules require exchanges to separate user deposits, keep 80% of coins in cold storage, and have insurance/reserves. Withdrawals/deposits cannot be blocked without good reason.
- South Korea continues to evolve crypto regulations, like asking for reports on unlicensed exchanges and classifying some digital assets as “virtual assets” eligible for interest. Regulations will likely continue changing as the crypto landscape evolves.
South Korea recently clarified its regulations on cryptocurrency interest and exchange requirements. The Financial Services Commission (FSC) published guidance stating that by July 2024, crypto investors must receive interest on exchange deposits. However, non-fungible tokens (NFTs) and central bank digital currencies (CBDCs) are exempt.
New Interest Rules
The FSC notice requires exchanges to separate user deposits from their own assets. In addition, 80% of coins must be kept in cold storage. Virtual asset providers should also have insurance or reserves in case of incidents like hacks. The guidance prohibits blocking deposits or withdrawals unless absolutely necessary.
Earlier in December, South Korean regulators asked users to report unlicensed crypto exchanges. The FSC is solidifying crypto regulations in the country. For example, it recently classified certain digital assets that function as payment methods as “virtual assets” eligible for interest.
SoKor on Paving the Way for Digital Currency
South Korea continues to update its crypto regulations. While NFTs and CBDCs are currently exempt from interest mandates, some NFTs may still qualify based on their payment functionality. As the crypto landscape evolves, regulations will likely continue to change as well.