Latest Crypto Stories
The Latest

A New Cryptocurrency Bill Passed in South Korea to Combat Unfair Trading

byPrajwal
June 30, 2023
2 minute read
The Financial Services Commission (FSC) of South Korea has requested a more precise definition of digital assets and virtual assets. The FSC stated to the unicameral legislature of South Korea that it wants to make a distinction between digital assets and virtual assets. According to News 1, the FSC does not consider non-fungible tokens and virtual currencies to be digital assets. The commission hopes that the country's upcoming Digital Asset Act will make the distinction. The FSC is based its argument on the idea that virtual currencies and central bank digital currencies (CBDC) should not be used interchangeably because "digital assets" encompasses both. The regulator also cited a subcategory that was similar to one that was mentioned in the executive order that US President Joe Biden issued in March. In that order, Biden urged parliament to make sure that South Korea's laws are in line with those of other major jurisdictions. FSC stated, "It is ambiguous whether this is a phrase with a confirmatory meaning that NFTs that meet the definition of virtual assets are virtual assets or a phrase in the real sense that all NFTs are included in virtual assets." With the introduction of the Special Financial Transactions Act in 2021, the term "digital assets" was made official by the South Korean parliament. The legislation will change the name of virtual currencies like Bitcoin and Ethereum to "Digital Asset," instead of "cryptocurrencies." Upbit chose to refer to itself as a digital asset exchange as a result of the change in terminology, whereas a joint consultative body comprised of the five largest exchanges was referred to as the "Digital Asset Exchange Joint Consultative Body." In the wake of FTX and Terra's demise, there have been calls to significantly alter South Korea's Digital Assets Act. Legislators are pushing for "mandatory separation of deposits" in addition to changes to the definitions of terms to give regulators more authority over projects in the space. Different names, different jurisdictions Financial hubs around the world have used different terms to classify assets in the ecosystem. Any valuable item represented in computerized or digital form is a digital asset, according to the Monetary Authority of Singapore (MAS).It is referred to as "crypto assets" when it is implemented on distributed ledgers. Similar to MAS, the Securities and Futures Commission (SFC) of Hong Kong asserts that virtual assets include all digital representations of value, including virtual currencies and tokens. Fabian Astic, head of Advanced Resources at Moody's Financial backers Administration, explained that "crypto money and digital forms of money are not equivalent to more extensive computerized finance."Astic said that distributed ledger technology (DLT) powers only a subset of digital finance.
Total
0
Shares
0
0
0

South Korea has passed its inaugural independent legislation for digital assets, aimed at enhancing safeguards for investors following the collapse of tokens created by local individual Do Kwon. This incident further intensified a massive decline in the crypto market, amounting to $2 trillion. The approval of this standalone bill signifies the country’s commitment to bolstering investor protection in the digital asset space, ensuring a more secure environment for participants.

According to a report from local news agency SBS Biz, the National Assembly of South Korea successfully passed the Virtual Asset User Protection legislation on June 30. The primary objective of this bill is to establish regulatory measures against unfair trade practises and provide enhanced protection for cryptocurrency investors. By implementing this legislation, the government aims to ensure a safer and more secure environment for individuals engaging in virtual asset transactions.

A comprehensive legislative proposal has been introduced, consolidating 19 separate bills related to cryptocurrencies. This all-encompassing framework aims to provide a clear definition of digital assets while imposing stringent consequences for illegal actions within the crypto industry. Activities like insider trading, market manipulation, and unfair practises will be met with severe penalties under this proposed legislation, ensuring a more regulated and fair environment for participants in the cryptocurrency market.

In South Korea, to safeguard investors, virtual asset service providers (companies that offer services related to cryptocurrencies) are now obligated to protect users’ deposits and offer insurance coverage. These measures are put in place to ensure that users are protected from risks such as hacks, computer failures, and other potential threats. It aims to provide added security and peace of mind for individuals engaging in virtual asset transactions in the country.

According to the SBS Biz report, if someone breaks the new regulation, they could face either being put in prison for at least one year or having to pay a significant amount of money as a fine. The Financial Services Commission has the power to enforce penalties that are twice the amount of the profits gained through the violation.

This news follows the recent sentencing of Do Kwon, the founder of Terraform Labs, who received a four-month prison term from a court in Montenegro for using a fake passport.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
Related Posts