Do Kwon Effect: New Korean Law to Protect Crypto Investors
The South Korean Crypto Bill aims to establish a framework for imposing penalties and fines for damages caused by illegal cryptocurrency trading.
The South Korean government is taking steps to protect cryptocurrency investors from implosions like Do Kwon's Terra ecosystem by passing new crypto bills. On June 30, the National Assembly adopted a law for the protection of workers of virtual infrastructure. The bill is designed to control unfair trading practices and protect crypto investors, local media outlet SBS Biz reported.
The law will combine 19 bills related to crypto, provide a comprehensive bill that identifies digital assets and impose penalties for illegal business activities such as the use of unspecified information, stock trading and other illegal activities. crypto business transactions.
As the media sector, the main purpose of the law to protect the users of virtual assets is to first place the legal capital in virtual assets and the nature of the country. The law also seeks to lay the groundwork for imposing penalties and fines for damages caused by illegal crypto transactions.
To protect investors, financial service providers (VASPs) in South Korea will now be required to take responsibility for user deposits and provide insurance. Such measures are necessary to ensure the safety of users against hacks, computer failures and other risks.
According to an SBS Biz report, breaking the new law is punishable by a fixed-term prison term of at least one year or a heavy fine. For example, the Financial Services Commission can impose double penalties for profits from illegal trading.
The news comes shortly after a court in Montenegro sentenced the founder of Terraform Labs to four months in prison after being found guilty of using a fake passport. The company's CEO is facing an arrest warrant in South Korea for allegedly violating the country's capital markets law.
South Korean prosecutors recently said that the meltdown of the Terra token is the biggest financial fraud or fraud case in the country.