Key Points:
- South Korea’s National Assembly has approved legislation to safeguard users of virtual assets and amend the country’s capital market law.
- The legislation prohibits unjust trading practices and provides user protection.
- The revised Capital Market and Financial Investment Business Act imposes penalties of up to double the profits from unfair trading.
- This is the first time specific measures have been introduced to address cryptocurrencies following the enactment of the Specific Financial Transaction Information Act.
- The Virtual Asset User Protection Act establishes a framework for imposing fines and liability for unfair trading of virtual assets.
- Providers of virtual assets are required to maintain records of transactions, secure client deposits, obtain insurance coverage, and participate in mutual assistance programs.
- Engaging in unfair trading practices can result in fines ranging from three to five times the avoided profits or losses.
- Individuals involved in significant unfair transactions may face fines up to twice the amount of unjust gains and potential criminal penalties.
- The definition of “unlawful profits” has been established to calculate penalties more accurately.
- A fixed penalty of 4 billion won has been established for cases of stock price manipulation with no improper gains determined.
Hot Take:
The approval of this legislation by South Korea’s National Assembly is a significant step in protecting users of virtual assets and ensuring fair trading practices in the country’s capital market. It demonstrates the government’s commitment to regulating the cryptocurrency industry and addressing the risks associated with virtual assets. With the establishment of fines, penalties, and requirements for virtual asset providers, investors can have greater confidence in participating in this emerging market. The legislation sets a precedent for other countries to consider similar measures to protect their citizens and promote the stability of the digital asset ecosystem.
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