South Korea Implements Stricter Regulations for Crypto Trading
South Korea’s financial regulators have set a date for the implementation of the Virtual Asset User Protection Act and the Virtual Asset Industry Supervision Regulations. The regulations will come into effect on July 19, according to local media outlets. The Financial Service Commission (FSC) disclosed the date after conducting a legislative notice on the Enforcement Decree.
New Regulations and Penalties
The new regulations outline offenses related to digital asset trading in South Korea and impose harsher penalties to deter market participants. Market manipulation, illegal transactions, and the use of undisclosed information for unfair advantage are strictly prohibited and carry criminal liabilities. Violations can result in imprisonment for at least one year and fines ranging from three to five times the value involved. If illegal profits exceed 5 billion won, penalties could be twice the sum and even lead to life imprisonment.
Requirements for Digital Asset Exchanges
Digital asset exchange institutions must ensure that user assets equal at least 5% of the value deposited with the platform. However, this requirement does not apply to offline-held assets or firms with accumulated reserves to cover potential risks. Additionally, cryptocurrency firms must manage trading assets through banks to ensure regulatory compliance. To prevent hacking incidents, exchanges and related firms must store 80% of used assets offline.
Ongoing Regulatory Supervision
The FSC and other regulatory bodies will continuously monitor compliance among digital asset firms and traders in South Korea. The commission has the power to investigate unfair practices and request necessary financial statements. Fines will be imposed after notifying the Prosecutor General of charges and providing complete investigative reports.
South Korea’s Commitment to Prevent Fraudulent Activities
South Korea has been updating its rules regarding digital assets to prevent fraudulent activities in the market. In addition to the new regulations, regulators have proposed changes to the employment of digital asset executives and license renewals in the country.
Hot Take: South Korea Strengthens Crypto Trading Regulations
South Korea is taking a proactive approach to regulate the crypto trading industry by implementing stricter rules and penalties. The Virtual Asset User Protection Act and the Virtual Asset Industry Supervision Regulations aim to deter market manipulation, illegal transactions, and the use of undisclosed information. Violators can face imprisonment and hefty fines. The new regulations also impose requirements on digital asset exchanges to ensure user protection and risk management. By storing assets offline and conducting transactions through banks, South Korea aims to prevent hacking incidents and enhance regulatory compliance. With ongoing supervision and potential fines for non-compliance, the country is committed to preventing fraudulent activities in the crypto market.
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