Wonhwa Market, Banks Formalize Deposit and Trust Procedures for Customer Deposits
Customer Deposit Usage Fee Rate to Be Announced in Early July
#. Virtual asset operator A was found to be commingling proprietary and user virtual assets in the same withdrawal wallet, citing the need for network fees when customers withdraw virtual assets. They were unaware that, upon enforcement of the law, proprietary and customer virtual assets must be stored separately.
#. Another virtual asset operator B was found to have calculated the cold wallet storage ratio based on the quantity of virtual assets but did not establish detailed internal regulations such as economic value calculation standards or management responsibilities. Upon future enforcement of the law, the cold wallet storage ratio must be maintained at 80% or higher. However, even within the exchange, a unified standard for applying prices per virtual asset has not been established.
On the 17th, the Financial Supervisory Service announced that it had identified such deficiencies through on-site consulting with the virtual asset industry ahead of the July enforcement of the "Virtual Asset User Protection Act (Virtual Asset Act)" and recommended improvements.
The on-site consulting targeted 15 applicant operators, including 5 in the KRW market and 10 in the coin market. This consulting focused on operators' legal obligations such as user asset management, transaction record maintenance and reporting systems, and abnormal transaction monitoring duties.
Major deficiencies included △ commingling proprietary and customer virtual assets in the same wallet without separation between wallets △ performing electronic signatures in an internet-connected environment when transferring virtual assets (cold wallet → hot wallet) △ the need to revise internal regulations such as economic value calculation standards for managing cold wallet storage ratios △ centralized storage of cold wallet private keys, inadequate management of electronic signature devices and wallet rooms, among others.
Additionally, insufficient preparation due to lack of understanding of the law was detected. Procedures such as customer notification or supervisory authority reporting obligations upon blocking deposits and withdrawals, and reserve fund accumulation methods were insufficient. Furthermore, in the KRW market, which has deposit and trust obligations for customer deposits, related systems and procedures were not adequately established due to delays in consultations with banks. Currently, a task force (TF) with banks is being formed to develop systems and internal regulations. Customer deposit usage fees will be announced in early July.
The obligation for continuous monitoring of abnormal transactions appears to be relatively well-prepared. Most operators have completed building transaction data accumulation systems, which form the basis for detecting abnormal transactions. They have either established or are developing abnormal transaction detection systems and are organizing dedicated teams and recruiting new personnel for these tasks.
Operators are building organizations, personnel, and systems to comply with the law and are preparing detailed internal control procedures. During the consulting process, some deficiencies such as user asset segregation and cold wallet management were identified and improvements were recommended.
The financial authorities stated, "We will begin pilot regulatory enforcement from mid-June before the law takes effect," and added, "We plan to conduct a final check on operators' preparation status and address any shortcomings."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
