"Virtual Asset Operators Must Report to Financial Authorities 1 Month Before Closure"

Guidelines Released for Virtual Asset Service Providers on Business Closure

From now on, virtual asset service providers must report their planned business closure to the financial authorities at least one month in advance. They must also immediately suspend new user registrations and deposit of funds, and notify users of the business closure.

On the 4th, the Financial Services Commission disclosed the "Guidelines on Business Closure of Virtual Asset Service Providers" containing these details.

Virtual asset service providers must prepare internal business guidelines related to business closure, including advance notice of closure, individual user notifications, support for withdrawal of deposits and virtual assets, withdrawal fees, retention and destruction of member information, and handling of user assets in custody.

After confirming the business closure, providers must first report the planned closure to the financial authorities by phone at least one month before the closure date (end of transaction support). At this time, they must prepare a "User Protection Plan upon Business Closure of Virtual Asset Service Providers" and submit it via email along with the required attachments.

Additionally, at least one month before the closure date, providers must announce the closure and related information using all available media such as their website and mobile app. They must also notify all individual members, including dormant members, using all available contact methods such as phone and email. They should also identify and inform users who have not requested withdrawal of deposits and virtual assets.

For at least three months after the closure date (normal withdrawal period), providers must support users' withdrawal of deposits and virtual assets through dedicated channels in the same manner as during business operations. During the normal withdrawal period after the closure announcement, providers must contact users who have entrusted assets above a certain amount at least once a week to provide guidance on asset withdrawal.

Withdrawal methods must support withdrawals to personal wallets, domestic service providers’ wallets, and overseas service providers’ wallets. During the normal withdrawal period, withdrawal services must be provided with the same fees as before, and even afterward, excessive withdrawal fees must not be charged when returning user assets.

If user assets remain unreturned three months after the closure date, providers must store the assets securely to prevent exposure to hacking or other security incidents. They must conduct daily reconciliations of user assets until all assets are returned and notify the financial authorities weekly of the status of asset custody.

The Financial Services Commission stated, "We will continue to monitor the status of user asset returns during the business closure process. For providers suspected of illegal activities or with poor performance in returning user assets, we will conduct urgent on-site inspections and, if necessary, proceed with strict measures such as audits."