South Korean messaging app KakaoTalk has announced a reduction in functionality for its integrated crypto wallet, Klip. This move is in line with the country’s upcoming Virtual Asset User Protection Act, which comes into effect on July 19.
KakaoTalk launched Klip within its ecosystem on June 4, 2020, providing users with easy access to recommended dApps such as THETA.tv Korea. Users received TFUEL, which could be converted into Klaytn-based “Beans” tokens developed by Theta Labs. The platform, developed by Ground X, offers users a unique opportunity to use crypto assets within the messaging app.
Recent reports indicate that in preparation for complying with South Korea’s new crypto regulations, GroundX has applied for a virtual asset service provider (VASP) license. Although KakaoTalk has chosen to scale back Klip’s functionality, the platform is committed to mitigating the risks associated with the Virtual Asset User Protection Act.
As a result, Klip has suspended crypto services within KakaoTalk 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 announced the upcoming implementation of its first crypto user protection law on July 19. With this new law, South Korea plans to systematically review 1,333 altcoins over six months, eliminating the possibility of a ‘mass takedown’. In light of the new regulatory standards, 29 crypto exchanges, including Upbit, Bithumb, and Gopax, were ordered by regulators to review their tokens in compliance with the law.
In short, KakaoTalk adapts to the new rules by making Klip less cryptocentric. But crypto fans in South Korea can still use Klip’s separate app for their digital currency needs. It’s a sign of the changing times as the country gears up for stricter crypto regulations.
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