Financial Services Commission and Korea Financial Services Commission Announce Draft Regulations on Virtual Asset User Protection Act

The Financial Services Commission and the Korea Financial Services Commission revealed on the 10th that they plan to legislate and enforce regulations under the Virtual Asset User Protection Act, effective from July next year in Korea. According to the regulations, investors in virtual assets will receive interest for depositing money when using exchanges. However, non-fungible tokens (NFTs) and deposit tokens related to central bank digital currencies (CBDCs) are excluded from the scope of virtual assets under the law. The exclusion is applicable unless NFTs function as widely tradable and interchangeable assets like regular virtual currencies (coins) or serve as a means of payment for specific goods or services. Additionally, the regulations specify how virtual asset service providers in Korea must manage and operate user deposit funds, requiring them to keep these funds separate from their own assets and deposit them in banks. In case of profits, providers are obligated to pay users fees (interest) on their deposits.