• South Korea’s National Assembly has passed the first phase of its cryptocurrency bill review.
• The bill seeks to bring clarity and consistency to the crypto market in the country and prevent money laundering.
• Violators of the new regulations may face penalties for failing to include necessary information in investor disclosures, engaging in price manipulation, or promoting crypto assets falsely.
Cryptocurrency Regulations in South Korea
South Korea has been working towards implementing certain regulations for cryptocurrencies. Recently, these efforts have cleared their first hurdle as the National Assembly passed the first phase of the review of the cryptocurrency bill. This is not yet the end of the process, however, as it will still need to be approved by Legislation and Judiciary Committee before it becomes law.
Benefits of Crypto Regulation
Once passed into law, this cryptocurrency bill will bring clarity and consistency to South Korea’s crypto market which has been operating in an unregulated environment so far. It should also create a safer trading environment for investors as well as help prevent money laundering and other illicit activities from taking place within the market.
Details of The Crypto Bill
The proposed legislation defines “virtual assets” as electronic representations of economic value that can be electronically traded or transferred. It does not include central bank digital currencies (CBDC) or any other services that fall under Bank of Korea’s purview. Furthermore, it requires crypto service providers to maintain user assets and deposits separately from their own funds; hold insurance; keep reserves for contingencies such as hacks or system failures; and record all transactions accurately. Co-mingling users’ funds with providers’ funds is discouraged under this bill.
Consequences Of Failing To Comply With Regulations
The new bill states that failing to include necessary information in investor disclosures, engaging in price manipulation, or promoting crypto assets falsely are illegal activities that could lead to criminal charges for anyone convicted of them.
If approved by Legislation and Judiciary Committee later this year, this cryptocurrency bill will become law officially bringing much needed clarity and consistency to South Korea’s crypto market while also providing protection against money laundering and other illicit activities that may have been taking place there previously.