South Korea is implementing stringent measures against cryptocurrency crimes through its inaugural law designed to safeguard digital asset investors. The new law, set to be effective on July 19, aims to combat crypto-related illicit activities such as price manipulation, insider trading, and unfair trading practices.
One notable provision in the law involves severe consequences for offenders, particularly those found guilty of pocketing wrongful gains exceeding 5 billion won (approximately $3.7 million). Individuals falling into this category could face a maximum penalty of life imprisonment.
South Korea’s Financial Services Commission (FSC) completed procedures for the new law, effective July 19. It requires virtual asset operators to maintain over 80% of investors’ assets for safety in the cryptocurrency market.
In addition to imposing strict penalties, the law focuses on the secure and reliable operation of virtual asset service providers, with a priority on protecting investors’ digital assets and deposits.
The FSC will also have the authority to supervise, inspect, and take action against virtual asset service providers engaging in unfair trading practices. Violations may result in the suspension of business operations, corrective orders, or further investigation by law enforcement agencies.
The Financial Services Commission (FSC) is South Korea’s top financial regulator, responsible for overseeing and regulating the country’s credit and equity sectors. It formulates financial policy and regulates financial market activities in South Korea.
The FSC was formerly known as the Financial Supervisory Commission and was established in 1998. It operates under the jurisdiction of the Government of South Korea and is headquartered in Seoul. Its responsibilities include making financial policies and directing the Financial Supervisory Service.
Governor Lee Bok-hyun of the Financial Supervisory Service (FSS) held a meeting with the CEOs of virtual asset service providers, urging them to thoroughly prepare for the implementation of the law. He emphasized the significance of business operators maintaining heightened awareness to minimize unfair and unethical practices that could undermine trust in the cryptocurrency industry.
South Korea has been enacting and enforcing tougher regulations on cryptocurrencies. In 2023, South Korea made several significant developments in the crypto space. The country established an interagency investigation unit to combat cryptocurrency crimes.
Additionally, events like Korea Blockchain Week 2023 and Ethcon Korea 2023 brought together the global crypto community for discussions, networking, and the sharing of research and proposals.