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Upbit & Other South Korean Exchanges Suffer With New Crypto Law In Effect

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On July 19, 2024, the Act on the Protection of Virtual Asset Users came into effect in South Korea. The new crypto law aims to create a more secure environment for virtual asset users and establish a sound order in the virtual asset market. However, the immediate impact on trading volumes across major South Korean crypto exchanges, including Upbit, has been significant. These exchanges reported notable declines in their trading volumes.

Impact On Upbit & Other South Korean CEXs

Upbit, founded in October 2017 by Dunamu, quickly became the largest crypto exchange in South Korea. Moreover, the Upbit exchange has maintained a leading position in the market owing to its user-friendly interface and a wide range of supported cryptocurrencies.

However, in the past 24 hours, Upbit’s trading volume plummeted by 29.4%, dropping to $1.50 billion, according to CoinGecko. Also, this significant decline underscores the market’s initial reaction to the new regulatory environment.

Founded in 2013, Bithumb is one of South Korea’s oldest and most well-known cryptocurrency exchanges. It has consistently ranked among the top 50 exchanges in terms of trading volume and user base. Despite its prominence, Bithumb experienced a 24.7% drop in trading volume, reaching $425.22 million in the past 24 hours.

Coinone, established in 2014, has positioned itself as a major player in the South Korean crypto market. It offers a robust trading platform and various services including staking and lending. Coinone took the hardest hit among the major exchanges, with trading volumes plunging by 38.4% to $23.36 million. Moreover, this steep decline reflects the market’s heightened sensitivity to regulatory changes.

As one of South Korea’s pioneering exchanges, Korbit was founded in 2013 and has been instrumental in driving the adoption of cryptocurrencies in the country. Korbit mirrored the impact on Coinone with a 38.4% to $5.07 million over the past 24 hours.

Also Read: Hong Kong Legislator Questions Transparency of HKMA Stablecoin Sandbox

Overview Of The New Crypto Regulation

The Act on the Protection of Virtual Asset Users aims to address various gaps in the previous regulatory framework, which primarily focused on anti-money laundering measures. Key provisions of South Korea’s new crypto law include:

1. Protection of Users’ Deposits and Assets: Virtual asset service providers (VASPs) must keep customers’ deposits in safe custody at banks and pay interest on these deposits. Users’ virtual assets must be segregated from the VASPs’ assets.

2. Insurance and Reserve Funds: VASPs are required to insure against liabilities from hacking or network failures or set aside a reserve fund for such contingencies.

3. Regulation of Unfair Trading Activities: The Act mandates surveillance for suspicious transactions. It also requires immediate reporting to South Korea’s Financial Supervisory Service (FSS). Those engaged in unfair trading activities face severe penalties, including criminal punishment or financial penalties.

4. Supervision and Sanctioning Powers: The Financial Services Commission (FSC) and the FSS are granted the authority to supervise, inspect, and sanction VASPs. This includes issuing corrective orders, suspending business operations, and imposing administrative fines.

Moreover, in preparation for the new law, financial authorities and VASPs have been working closely to ensure compliance. The South Korea‘s FSC prepared detailed subordinate statutes, and the FSS offered on-site consultations and a roadmap for VASPs.

Additionally, a pilot test was conducted to assess readiness. The Digital Asset Exchange Alliance (DAXA) and 20 virtual asset exchange service providers also developed best practice guidelines to support self-regulation within the industry.

Also Read: Crypto Titans Bet On Donald Trump’s Win For SEC Shake-Up

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Kritika boasts over 2 years of experience in the financial news sector. Currently working as a crypto journalist at Coingape, she has consistently shown a knack for blockchain technology and cryptocurrencies. Kritika combines insightful analysis with a deep understanding of market trends. With a keen interest in technical analysis, she brings a nuanced perspective to her reporting, exploring the intersection of finance, technology, and emerging trends in the crypto space.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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US SEC Drops Charges Against Hawk Tuah Girl Hailey Welch

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Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.

US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges

The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.

Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.

Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.

This Is A Developing News, Please Check Back For More

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Sonic Labs To Abandon Plans For Algorithmic USD Stablecoin, Here’s Why

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Barely a week after hinting at launching an algorithmic USD stablecoin, Sonic Labs is shuttering its plans. Sonic Labs co-founder Andre Cronje revealed that incoming stablecoin regulation in the US contributes to the change of stance.

Sonic Labs Makes U-Turn Over Algorithmic USD Stablecoin

In mid-March, Sonic Labs disclosed plans for a yield-generating algorithmic stablecoin for its blockchain. However, new developments in the US regulatory landscape are forcing the company to ditch its algorithmic stablecoin ambitions.

Sonic Labs co-founder Andre Cronje confirmed the change in direction via an X post following the release of the full draft of the STABLE Act by Congress for clearer oversight. According to the text, lawmakers are pushing for a two-year moratorium on algorithmic stablecoin, souring Sonic Labs plans.

Unlike mainstream stablecoins backed by fiat or other commodities, algorithmic stablecoins rely on smart contracts to maintain their peg. The 2022 implosion of Terra’s ecosystem following the de-pegging of its TerraUSD (UST) algorithmic stablecoin stunned regulators.

“We will no longer be releasing a USD-based algorithmic stablecoin,” said Cronje.

In a light-hearted note, community members teased potential strategies for Sonic Labs to sidestep incoming stablecoin regulation. Apart from the loophole of launching the algorithmic stablecoin before the regulation goes live, Cronje teased an algorithmic dirham that will be denominated in USD.

Industry Players Are Bracing For New Stablecoin Regulations

Stablecoin issuers are steeling themselves for incoming stablecoin regulations in the US. While the GENIUS Act and STABLE Act continue to inch forward, there are common denominators in both bills.

For starters, there is the requirement for equivalent reserves at a 1:1 ratio with both bills steering clear of algorithmic stablecoins. The White House is favoring the GENIUS Act over the STABLE Act as lobbyists rally to stifle the possibility of a Conference Committee.

Authorities are targeting stablecoin regulation to reach Trump in two months as issuers jostle for position. Tether, Circle, and Ripple are staking their claims to lead the US government’s ambitions to rely on stablecoins to maintain the dollar’s dominance.

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FDIC Revises Crypto Guidelines Allowing Banks To Enter Digital Assets

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The Federal Deposit Insurance Corporation (FDIC) has updated its guidelines, enabling banks to engage in cryptocurrency-related activities without seeking prior approval. This new policy shift signals a change in the FDIC’s approach to the growing role of digital assets in the banking sector.

New FDIC Guidelines on Crypto-Related Activities

The FDIC has issued a new Financial Institution Letter (FIL-7-2025), which provides updated guidance for banks looking to engage in cryptocurrency activities. The new guidance rescinds the previous policy set out in FIL-16-2022, which required banks to notify the FDIC before engaging in such activities.

Under the new rules, banks can now participate in permissible crypto-related activities without waiting for FDIC approval, as long as they manage the risks appropriately.

This change is seen as a shift in the FDIC’s stance, following the agency’s earlier stance that required prior approval for crypto engagements. FDIC Acting Chairman Travis Hill expressed that this new approach aims to establish a more consistent framework for banks to explore and adopt emerging technologies like crypto-assets and blockchain.

“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said Hill in a statement.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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