South Korea’s messaging app KakaoTalk has announced a reduction in functionality for its integrated crypto wallet, Klip. This move aligns with the country’s upcoming Virtual Asset User Protection Act, set to take effect on July 19.
KakaoTalk launched Klip within its ecosystem on June 4, 2020, offering users easy access to featured dApps like THETA.tv Korea. Users received TFUEL, which could be converted to Klaytn-based “Beans” tokens, developed by Theta Labs. The platform, developed by Ground X, provides users with a unique opportunity to use crypto assets within the messaging app.
Recent reports indicate that GroundX, in preparation for complying with South Korea’s new crypto regulations, has applied for a virtual asset service provider (VASP) license. While KakaoTalk has opted to scale back Klip’s functionality, the platform aims to mitigate the risks associated with the Virtual Asset User Protection Act.
As a result, Klip within KakaoTalk has suspended crypto services, and users can no longer view token balances or initiate token transfers. However, customers can still use Klip’s standalone app, launched in July 2022, for crypto services.
South Korea has announced the upcoming implementation of its first law on crypto user protection on July 19. With this new act, South Korea plans to systematically review 1,333 altcoins over six months, eliminating the possibility of a “mass delisting.” In connection with the new regulatory norms, 29 crypto exchanges, including Upbit, Bithumb, and Gopax were ordered by the regulators to assess their tokens in compliance with the law.
In short, KakaoTalk is adjusting to the new rules by making Klip less crypto-centric. But crypto fans in South Korea can still use Klip’s separate app for their digital currency needs. It is a sign of the changing times as the country gets ready for stricter crypto regulations.
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