The government of South Korea has issued a new update to the Virtual Asset Users Protection Act,with cryptocurrency-focused regulations which aim to protect investors from market crimes, issuing a
On Feb. 7, The Financial Services Commission (FSC), South Korea’s top financial regulator, issued an announcement about the implementation of a law that seeks to protect the rights of crypto investors and promote transparency.
South Korea’s new crypto law puts a straightforward ban on the use of “undisclosed important information” about crypto, market manipulation and illegal trading. The legislation imposes major criminal punishment measures and fines for violations, including fixed-term imprisonment of more than one year or a fine equivalent to three to five times the amount of illegal profits.
According to the announcement, the Virtual Asset User Protection Act is expected to come into force on July 19, 2024 after the bill was enacted on July 18, 2023.
According to the FSC, criminals who make more than 5 billion won ($3.8 million) from illegal crypto trading schemes face life sentences.
“The FSC’s authority to supervise and inspect virtual asset business operators and to investigate and take action on unfair trading practices is also stipulated in the law,” the regulator noted. The authority added that it’s competent to supervise whether virtual asset business operators comply with the Virtual Asset User Protection Act and inspect their business and status.
As previously reported, South Korean lawmakers passed the Virtual Asset User Protection Act in June 2023. The new crypto law came in response to a major industry implosion involving Terraform Labs and its founder Do Kwon, who is a South Korean national. Following the Terra Luna cryptocurrency collapse in May 2022, more than $450 billion was wiped from the market.
Do Kwon is currently facing extradition to the United States, rather than South Korea, where he faces eight charges, including commodities fraud, securities fraud, wire fraud and conspiracy to defraud and engage in market manipulation.
In other news from Asia, Thailand’s Ministry of Finance has announced the exemption of value-added tax (VAT) on digital asset trading to push Thailand towards becoming a digital asset hub, local news agency Bangkok Post reported on Feb. 7. The regulator has decided to ease tax rules by suspending the requirement to pay 7% VAT on income derived from crypto starting from Jan 1, 2024, with no expiration date.