Following the Terra collapse in the spring of last year, South Korean lawmakers plan to tighten regulations with a focus on protecting investors in virtual assets, such as digital currencies, and toughening the penalties for unethical commercial practices in the sector. Local media reports that the National Assembly and the Financial Services Commission (FSC) are working to pass a bill allowing financial authorities to supervise cryptocurrency exchanges and monitor unfair trade practices like using confidential information, price manipulation, and fraud.
The legislation is emerging: This plan should ensure greater investor protection beginning in 2023, even if there are now 14 different measures relating to cryptocurrencies as well as digital assets circulating in the National Assembly and the ambitious, comprehensive Digital Asset Basic Act in the works. According to what an anonymous National Assembly representative informed the media:
“In the U.S., since the Securities and Exchange Commission (SEC) exercises a wide range of powers, it is possible to punish unfair trade in virtual assets without separate legislation, but in Korea, related legislation is absolutely necessary.”
Although the specific penalties for different types of misconduct are not yet known, it is anticipated that they will be created to synchronize oversight and punishment at a level akin to that of the conventional financial industry. Do Kwon, a co-founder of Terra, was the subject of an arrest order from South Korean police in September. The warrant was later revoked, and Kwon was added to Interpol’s Red Notice list so that law enforcement could find and perhaps detain him.
The co-founder of Terra was given a mandate by South Korea’s foreign ministry on October 6 to give up his passport or risk having it revoked. To stop money laundering attempts employing digital assets, the FSC declared at the end of October that it would monitor crypto whales with holdings exceeding 100 million won ($70,000).
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