The cryptocurrency bill in South Korea aims to create a framework for enforcing penalties and establishing culpability for losses brought on by unfair bitcoin trading.
Following occurrences like Do Kwon’s Terra ecosystem, the South Korean government has passed a new crypto bill in an effort to protect cryptocurrency investors. This action demonstrates the government’s dedication to overseeing cryptocurrency market regulation and safeguarding investor safety.
In order to prevent unfair business practices and protect cryptocurrency investors, the National Assembly enacted the Virtual Asset User Protection legislation on June 30th. The Act was created in response to the urgent need for thorough regulations in the quickly developing cryptocurrency sector.
The proposal combines 19 crypto-related laws into a single piece of legislation, defining digital assets and outlawing illegal trading techniques such the use of secret information, market manipulation, and other unfair trading tactics in the crypto market. This strategy aims to create unambiguous rules and deter dishonest conduct.
By primarily applying the Capital Market Act to virtual assets that resemble securities, the Virtual Asset User Protection Act makes sure that both traditional securities and digital assets are subject to the same level of regulation and protection. This strategy tries to encourage responsibility and transparency in the cryptocurrency market.
Virtual asset service providers (VASPs) in South Korea are now required to take ownership of user deposits and offer insurance in order to protect investors. By protecting users from threats including cyberattacks, computer malfunctions, and improper handling of cash, these steps hope to boost investor confidence in the cryptocurrency industry.
The new regulations carry a fixed-term prison sentence of at least one year or hefty penalties for violations. The severe fines show how determined the government is to stop unfair trading practices and discourage illegal activity in the cryptocurrency industry.
These changes occur soon after Do Kwon, the founder of Terraform Labs, was given a four-month prison term for using a fake passport by a Montenegrin court. The significance of regulatory measures to maintain compliance and accountability within the cryptocurrency business is highlighted by this case.
The South Korean government’s dedication to policing the cryptocurrency market and protecting investors from dishonest acts is shown in the Virtual Asset User Protection Act. The Act aims to improve the security and transparency of the country’s cryptocurrency ecosystem by imposing fines, enforcing obligations on VASPs, and promoting transparency, therefore supporting a strong and robust digital asset market.