The South Korean government has introduced revisions to the Virtual Asset Users Protection Act, aiming to implement cryptocurrency-focused regulations geared towards safeguarding investors from market crimes.
On Feb. 7, the Financial Services Commission (FSC), South Korea’s primary financial regulatory body, unveiled the new law, emphasizing its objective to protect the rights of crypto investors and enhance market transparency.
The updated legislation in South Korea prohibits the use of “undisclosed important information” pertaining to cryptocurrencies, market manipulation, and illicit trading activities. Significant penalties, including fixed-term imprisonment exceeding one year or substantial fines ranging from three to five times the amount of illegal profits, are prescribed for violations.
The Virtual Asset User Protection Act is slated to become effective on July 19, 2024, following its enactment on July 18, 2023. Notably, individuals involved in illegal crypto trading schemes generating profits exceeding 5 billion won ($3.8 million) could face life sentences.
The FSC emphasized its authority to oversee and inspect virtual asset business operators, as well as investigate and take action against unfair trading practices, as stipulated in the law. It reiterated its role in ensuring compliance with the Virtual Asset User Protection Act and conducting inspections to assess the business operations and status of virtual asset operators.
The enactment of South Korea’s new crypto law follows a significant industry upheaval involving Terraform Labs and its founder, Do Kwon. In response to this incident, lawmakers passed the Virtual Asset User Protection Act in June 2023. Do Kwon currently faces extradition to the United States, where he faces charges related to commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation.
In parallel developments from Asia, Thailand’s Ministry of Finance has taken steps to promote the nation as a digital asset hub. As reported by local news agency Bangkok Post on Feb. 7, the ministry announced the exemption of value-added tax (VAT) on digital asset trading, effective from Jan. 1, 2024, with no specified expiration date. This move is aimed at facilitating Thailand’s transition into a leading digital asset destination by easing tax regulations.
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