South Korea’s cryptocurrency investment protection law has been passed and will take effect in 12 months
According to the Assembly’s official website, on Friday, the National Assembly of South Korea adopted a measure that seeks to safeguard the rights of cryptocurrency investors.
Penalties for manipulating prices, falsely advertising crypto assets, and withholding investor data are all included in the new law. Convicted offenders face three and five times the money they made from their illegal activities as a fine or at least one year in jail.
However, the Bank of Korea now has the authority it had been fighting for with the country’s financial authorities to seek information from cryptocurrency sites. The bank has warned that the cryptocurrency market’s volatility threatens monetary and financial stability and has called for more sector regulation.
Hwang Suk-jin, a Digital Asset Special Committee member for the Ruling People’s Power Party, told Forkast in May that the proposed measure would define the legal rights of virtual asset users and make the cryptocurrency market more stable.
In 2020, South Korea’s cryptocurrency economy was one of the most robust in the world, placing seventh on the Global Crypto Adoption Index produced by blockchain analytics company Chainalysis.
But in 2022, when the Terra-Luna cryptocurrency and stablecoin issued in the nation collapsed, costing hundreds of thousands of investors US$40 billion, the country slipped to 23 in the index. However, data from CoinMarketCap shows that the South Korean cryptocurrency exchange Upbit is still the third biggest in the world in terms of trading volume.
The Terra-Luna fiasco prompted lawmakers in South Korea to pass laws establishing a legal framework to include cryptocurrencies, with an initial emphasis on investor protection. The next round of crypto legislation will likely address laws for domestic corporations with regard to token issuance and data transparency.