Legal system of cryptoassets protection in South Korea

The industry of cryptoassets is developing dramatically. A special factor for this was the approval and start of ETF trading (Exchange-traded fund) for Bitcoin and ETH. As a result, traditional investors received the opportunity to trade cryptoassets using traditional financial instruments. In turn, this further aroused interest from retail investors in purchasing cryptoassets on centralized cryptocurrency exchanges, as well as in using specialized services that provide services related to the use of cryptoassets. In addition, Donald Trump’s victory in the presidential elections in the United States of America and his promises to create a strategic Bitcoin reserve Bitcoins lead to the conclusion that the cryptoasset industry will continue to receive even greater financial infusions. However, against this background, there is a rather serious legal gap – the lack of adequate legislation in most states that would ensure the safety of investors who invest their own funds (or clients’ funds) in cryptoassets. Not to mention the general presence of specific legislation on cryptoassets beyond these states. In connection with this, an extremely important issue today is the development of legislation that would protect investors’ assets. In particular, a striking example is the state of South Korea, which, although it does not have detailed legislation that would regulate the issuance, placement and circulation of cryptoassets, has specific regulatory regulation especially for the protection of investors’ funds in cryptoassets. The article examines in detail the legislation of South Korea on the protection of cryptoassets, its advantages and disadvantages. It is also broadly compared with the MICA Regulation in the European Union, which provides for more detailed protection of users’ cryptoassets. At the same time, it is established that the example of South Korea’s legislation can serve as a regulatory minimum for Ukraine regarding the protection of users’ cryptoassets. It is concluded in the article that while South Korea offers rather limited provisions for protecting users’ cryptoassets, they contribute to legal certainty and strengthen regulatory requirements for cryptoasset service providers regarding the handling of their clients’ funds.