The Korea Financial Intelligence Unit (KoFIU) issued recommendations for virtual asset service providers on November 21 that those expected to terminate their business operation should inform their customers about the business closure plan at least one month prior to the expected termination date.
More specifically, when deciding to terminate their business operation, VASPs are first advised to establish an internal process to minimize potential damage or loss to virtual asset users, addressing issues such as the issuance of advance notice to their customers, provision of support for deposit/asset withdrawal, handling of user data and remaining user assets, etc.
Second, when a business closure is in sight, VASPs are recommended to notify their business termination plan at least one month before the expected termination date communicated via website and to the users individually. After notifying, they should immediately halt signing up new users or accepting deposits. In addition, they should set up a plan and allow a sufficient timeframe (for instance, for at least three months) for their customers to withdraw deposits (in cash or virtual asset).
Third, the VASPs facing business termination should handle their customers’ user data and other relevant data as required by related laws.
Fourth, virtual asset users are advised to check the operating status of their service providers to avoid any loss or damage. If they find that their service providers are no longer in operation, they should check their assets in custody and seek immediate redemption.
The KoFIU will closely monitor VASPs to ensure that their business termination does not cause damage to users and carry out site inspections when deemed necessary. The authorities will also thoroughly check whether the VASPs facing business termination are faithfully carrying out measures to ensure user protection.
* Please refer to the attached file for details.