The first Cryptocurrency Bill by South Korea made it through the first regulatory hurdles
Many countries are working on crypto regulations to help them keep track of any crypto-related activity. South Korea has also stepped in on this. They have proposed a cryptocurrency regulation bill that has passed the first-phase review.
KEY TAKEAWAYS
- The South Korean legislation has passed a bill for better regulation of all sorts of Digital assets.
- There are severe punishments for people who are indicted under this law.
The regulations include strict measures. Also sentencing recommendations if anyone is found guilty of financial crimes related to digital assets including cryptocurrency. The Financial Services Commission of the nation will get complete power if this bill passes through all phases of review. They will be able to investigate and even supervise financial activities associated with any form of digital asset.
The proposed bill has numerous stipulations in it that govern the sale, storage, and trading of cryptocurrencies, with an emphasis on consumer protection and compliance reporting.
A member of the ruling People Power Party’s Digital Asset Special Committee, Hwang Suk-Jin shared that the ruling as well as the opposition party are on board on this. So we can expect the legislation to become law by the end of the year. This new law is just another effort by the state to regulate and legitimize the cryptocurrency market and protect investors from scams or other fraudulent activities.
What will happen if the Bill passes?
If the Bill passes, it will become one of the most comprehensive cryptocurrency laws in the world. Moreover, it will require people who are involved in crypto trading or so to self-report any anomalies they witness. This is supposed to help maintain compliance.
The bill also enforces punishments for those who run foul businesses. If an infraction results in losses of less than $3.75 million approx. This may include crimes like failing to include the required information in investor disclosures, price manipulation, and false promotion of crypto assets. The offender causing any such issues may face fines in the amount of three to five times the total losses and may even be imprisoned for up to a year.
If the crime crosses the price of $3.75 million mark the punishment will be more severe. The offenders will face five years in prison. The legislation was announced in June 2022, just a month after the collapse of the Terra ecosystem, which triggered massive declines in the cryptocurrency sector. The Co-founder of Terraform Labs Shin Hyun-Seong and nine others were subsequently indicted by the South Korean government.
The sentence given to the SEO of Titanium Blockchain, convicted of defrauding consumers for $21 million, was four years and three months. It is a much less severe punishment as compared to South Korean law.