South Korea’s Virtual Assets Committee (VAC), which was inaugurated twelve months prior to oversee the digital currency sector, has ceased operational activity, with zero convocations having occurred since May.
South Korea’s periodical, Kookmin Ilbo, communicates that governmental attention is being directed toward stimulating the equity market rather than concentrating on the liberalization of digital asset regulation.
The cessation of the VAC’s operations ensues from a political redirection following the impeachment of President Yoon Suk-yeol, with his successor, Lee Jae-myung, having embraced an alternative digital asset doctrine. Lee’s tenure now appears to elevate cooperation between legislative officials and the Financial Services Commission (FSC), resulting in the VAC being relegated to the periphery.
The initial strategic plan for permitting publicly traded corporations to acquire digital assets by 2025 is appearing progressively improbable to be accomplished.
South Korea Rolls Out New Crypto Rules and Regulations
In the interim, a decision was promulgated by South Korean supervisory authorities to mandate rigorous responsibility standards for digital asset trading platforms. This action succeeds a security breach incident at Upbit, the nation’s foremost virtual currency exchange, according to official governmental declarations.
The inclusion of these stipulations in impending digital asset legislation, which aims to augment capital provider safeguards, was affirmed by the Financial Services Commission (FSC), according to the agency’s declaration.
The stringent responsibility doctrine mandates that corporations furnish redressal without necessitating demonstration of carelessness or illicit behavior. The operational framework ensures recompense for aggrieved parties without obligating them to establish accountability, as detailed by legal authorities.
This methodology is presently extended by South Korea to sectors deemed high-hazard, encompassing vehicular mishaps and perilous manufacturing operations, as demonstrated by official supervisory records.
Pursuant to the forthcoming regulations, digital asset trading platforms would be mandated to indemnify account holders for pecuniary damages arising from security breaches or technical malfunctions. Responsibility would be initiated irrespective of the corporation’s culpability, unless patrons exhibited severe dereliction, as stipulated by the preliminary enactment.
The proposed oversight structure is consonant with the statutes governing conventional financial entities in South Korea under the Electronic Financial Transactions Act. Digital asset platforms currently function beyond the legal purview of that specific Act, thus generating a supervisory lacuna that leaves capital providers devoid of legislative safeguards, as indicated by judicial commentators.
The Upbit occurrence brought this susceptibility into sharp relief, thereby instigating demands for modification. The deficiency was recognized by Lee Chan-jin, governor of the Financial Supervisory Service (FSS), who asserted that system integrity constitutes “the vital essence of virtual resource markets.”
The magnitude of the problem was uncovered by statistics collated by supervisory bodies. From 2023 through September 2025, twenty cybersecurity occurrences, impacting over 900 account holders, were documented by five prominent trading platforms. Six of these incidents, affecting 616 patrons, were logged by Upbit; Bithumb recorded four episodes influencing 326 users; and Coinone sustained three occurrences affecting 47 users, per FSS figures.
The security compromise at Upbit was initiated on November 27th, persisting from 4:42 to 5:36 KST, resulting in a duration of 54 minutes. Substantial quantities of tokens built on Solana were moved to non-custodial addresses during the violation, based on the trading platform’s log entries.
No legal foundation to levy direct penalties upon trading platforms under the existing Virtual Asset User Protection Act was discovered by supervisory bodies, the FSC communiqué stated.
The forthcoming legislation would stipulate that digital currency platforms adhere to identical security criteria as conventional fiscal organizations. Trading venues would be obliged to sustain suitable personnel, premises, and resilient information technology infrastructure, and furthermore, submit yearly technological strategies to supervisory bodies, as outlined by the proposed framework.
Penalties would be substantially escalated under the suggested modifications, with financial sanctions potentially extending to 3% of the corporations’ yearly gross income, as demonstrated by the supervisory records.
Rapid legislative endorsement is anticipated by sector commentators, given the incumbent political faction’s vocal backing for capital provider safeguarding stipulations. Digital trading platforms are allegedly making preparations to modify their adherence protocols in anticipation of the forthcoming alterations.
