The South Korean government has taken decisive
action to safeguard the interests of cryptocurrency investors with the
enactment of the Virtual Asset Users Protection Act, announced by the Financial
Services Commission (FSC) today (Wednesday).
The new law, slated to take effect on July 19,
2024, marks a significant step in regulating the cryptocurrency market in South
Korea. Aimed at curbing market crimes and enhancing transparency, the
legislation prohibits the use of undisclosed significant information in
cryptocurrency transactions, as well as activities related to market
manipulation and illegal trading.
Under the provisions of the Virtual Asset Users
Protection Act, severe penalties await violators, including fixed-term
imprisonment exceeding one year or fines ranging from three to five times the
amount of illegal profits. Particularly, individuals who amass more than $3.8
million from illicit cryptocurrency
trading schemes may face life sentences.
Moreover, the FSC emphasizes its
authority to supervise and inspect virtual asset business operators to ensure
compliance with the newly enacted legislation. This includes the investigation
and enforcement of measures against unfair trading practices, underscoring the
regulator’s commitment to maintaining market integrity.
#CryptoNews: South Korea’s Financial Services Commission (FSC) has proposed new legislation to its financial regulations that would give the watchdog more authority over the local crypto sector.🇰🇷https://t.co/hiQ7B8NEVt
— CoinMarketCap (@CoinMarketCap) February 6, 2024
Terraform Labs Collapse Sparks South Korea’s
The impetus for the Virtual Asset Users
Protection Act stemmed from a significant industry upheaval involving Terraform
Labs and its founder, Do Kwon, a South Korean national. Following the collapse
of Terra in May 2022, which wiped out more than $450 billion from the market,
South Korean lawmakers moved swiftly to address regulatory gaps and strengthen
Do Kwon, currently
facing extradition to the United States, faces multiple charges, including
commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and
engage in market manipulation.
Earlier, the FSC
unveiled draft regulations mandating that companies engaged in
cryptocurrency holding or trading disclose…