KoFIU Advises VASPs to Inform Customers about Business Closure One Month before Expected Termination Date

On 21 November, KoFIU released comprehensive guidelines directed at VASPs contemplating business termination. The advisory underscores the imperative for VASPs to proactively inform their clientele about impending closures at least one month before the anticipated termination date.
In delineating the cessation process, VASPs are first urged to institute an internal mechanism geared towards mitigating potential losses for virtual asset users. This involves issuing advance notices to customers and addressing logistical aspects such as deposit and asset withdrawal support, data handling, and safeguarding remaining user assets.
Following this, as business closure becomes imminent, VASPs are then advised to communicate the termination plan a month beforehand, disseminating this information through their website and individualized messages to users. Concurrently, they should cease enrolling new users or accepting deposits. Furthermore, VASPs are encouraged to devise a withdrawal plan, affording customers a reasonable timeframe, no less than three months, for withdrawing deposits, whether in cash or virtual assets.
In adherence to regulatory requirements, VASPs facing business termination must diligently manage customer and other pertinent data. Simultaneously, virtual asset users are counselled to vigilantly monitor the operational status of their service providers to avert potential loss or damage. Should users discover that their service providers have ceased operations, immediate assessment of assets in custody and prompt redemption are recommended.
The KoFIU asserts its commitment to stringent oversight, pledging to closely monitor VASPs undergoing business termination to safeguard users from any detrimental repercussions. Site inspections will be conducted as deemed necessary, ensuring the faithful implementation of protective measures by VASPs navigating closure. Authorities will rigorously assess compliance with user protection measures to uphold the integrity of the virtual asset ecosystem.