Virtual Asset Act Implementation Nears... Upbit and Coinone Gain Attention for Transparent Asset Management

Virtual Asset Operators Must Separate User Deposits and Proprietary Assets
Upbit Stores Over 80% of Customer Deposited Virtual Assets in 'Cold Wallet'

With the enforcement of the Act on the Protection of Virtual Asset Users (Virtual Asset User Protection Act) approaching, the proactive and transparent asset management systems of Upbit and Coinone are gaining attention.

According to the virtual asset industry on the 8th, virtual asset exchanges Upbit and Coinone conduct quarterly audits of the amounts and virtual assets deposited by users and publish the reports.

Once the Virtual Asset User Protection Act, which takes effect on the 19th, is fully applied, virtual asset operators must separate users' deposited assets from their own assets and entrust them to a credible institution so that users can retrieve their assets anytime upon request.

Since October 2018, Upbit has been conducting quarterly audits of users' deposits and virtual assets through an external accounting firm and posting the reports in notices accessible to all users. According to the audit report from April, Upbit holds assets amounting to 103.15% of users' deposited funds and 102.82% of virtual assets. Additionally, it disclosed the holding ratios by virtual asset categories to enhance transparency.

Coinone has also been publishing asset audit reports since December 2021. In the report from March, it announced that it holds assets exceeding 100% of customers' deposited quantities. Coinone holds 103.2% of users' deposited funds and 101.42% of virtual asset deposits, respectively.

Meanwhile, a regulation will be established requiring that more than 80% of customers' deposited virtual assets be stored in 'cold wallets' that are safe from hacking. A 'cold wallet' refers to a wallet operating offline. In other words, since it is not online, it has the advantage of being nearly impossible to hack.

An industry official in the virtual asset sector said, "Currently, some virtual asset operators such as Upbit are understood to already store more than 80% of customers' deposited virtual assets in cold wallets," adding, "Various operators are actively moving ahead of the enforcement of the Virtual Asset User Protection Act." He continued, "The entire industry must comply with regulations and work together to create a market where customers can use services with peace of mind."

This content was produced with the assistance of AI translation services.