The Act on the Protection of Users of Virtual Assets, etc. (User Protection Act), which came into effect on July 19, 2024, introduced a new legal paradigm to the Korean virtual asset market. The Act aims to protect investors and improve market transparency, and its main contents include the protection of user assets, regulation of unfair trade, supervision and disposal, and penalties. In particular, it prohibits market manipulation, unfair trade, and the use of undisclosed material information, and stipulates strong penalties for violations.

With the implementation of this law, virtual assets have gained a clear legal status, which will be an important reference point for related legal disputes. It also imposes enhanced obligations on virtual asset service providers (VASPs) to ensure safe storage of user assets and prompt compensation in the event of an accident.

The User Protection Law is expected to play a role in curbing illegal activities and promoting fair competition in the virtual asset market, and will mark an important turning point in the maturation and development of the market. Going forward, legal professionals will need to closely analyze the legal issues related to the implementation of the law and provide appropriate legal advice to their clients.

[diassetpro - 2024.08.15]

URL: Enforcing The Cryptocurrency User Protection Act: A New Legal Paradigm