South Korea’s crypto regulation bill takes a leap forward
South Korea’s plans for crypto regulations cleared their first hurdle with the National Assembly passing the first stage of review.
Following the successful passage of the cryptocurrency bill in the National Assembly, the Law and Justice Committee will have to pass the bill. It will probably be legal this year.
Hwang Suk-jin, Digital Asset Special Committee member of the ruling People Power Party, told Forkast: “As both the ruling and opposition parties have agreed on the matter, the legislation will become law in the first half of the year.”
Crypto service providers must be insured
The bill discourages crypto service providers from mixing users’ funds with providers’ funds. In addition, they must keep the funds insured and have case reserves to deal with situations such as a hack or system failure.
The Financial Service Commission (FSC) will oversee the crypto asset class, excluding the Bank of Korea’s Central Bank Digital Currency (CBDC).
Penalties for non-compliance
The South Korean government has attempted to draft the bill with consumer protection in mind. In fact, people who make unfair profits can face a penalty of three to five times their illegal gains or up to a year in prison. This includes price manipulation or deceptive marketing campaigns.
In cases where the victim reports losses exceeding 5 billion Korean won (about $3.73 million), the penalty may be increased. A penalty range of between five years and life imprisonment is available to the courts.
Suk-jin wants to bring transparency to the nation’s crypto ecosystem. He concludes, “[The bill] will play an important role in establishing market order as it develops the constitution to block unfair trade practices.”
Moreover, the EU Parliament recently approved the Markets in Crypto-Assets (MiCA) regulation. Experts believe that MiCA could soon become “a universal standard for customer protection and business efficiency.”
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