South Korea exempts NFTs and CBDCs from cryptocurrency interest obligations

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According to a notice released by the FSC, digital asset investors will have until July 2024 to earn interest when depositing cash on exchanges.

Domestic regulatory authorities have established not only the classification of virtual assets, but also methods for managing customer deposits for virtual asset providers.

Digital asset investors must receive interest when depositing cash on exchanges by July 2024, according to a notice issued by South Korea’s regulator, the Financial Services Commission (FSC).

However, the guidance makes it clear that the law does not apply to non-fungible tokens (NFTs) or central bank digital currencies (CBDCs).

According to domestic media reports on December 10, the FSC plans to present these legislative guidelines. Regulators pointed out that there may be exceptions even without NFTs.

According to research, even if classified as an NFT, tokens that are issued in significant quantities and serve as a means of payment may be included in the virtual asset classification. In this case, you can earn interest on those assets by depositing them on the exchange.

Domestic regulatory authorities have established not only the classification of virtual assets, but also methods for managing customer deposits for virtual asset providers. The letter clarified that exchanges must keep user deposits separate and hand over their own assets to banks. Additionally, 80% of your funds must be stored in a cold wallet.

The guidance also explains how to prepare for a computer disaster or hacking. According to regulations, companies providing virtual asset services must sign up for insurance or accumulate reserves. Meanwhile, the law also prohibits blocking deposits or withdrawals unless absolutely required or required by a court or financial regulator.

Laws related to the domestic cryptocurrency industry have been strengthened. Earlier this month, the country’s financial authorities asked users to report unlicensed cryptocurrency exchanges operating in the region. These efforts were led by the Korea Financial Intelligence Unit and the Digital Asset Exchange Association (DAXA).

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