Wary of another Terra Luna catastrophe, South Korean legislators passed the historic Virtual Asset User Protection Act on June 30 to prevent unfair trade practices and protect crypto investors.
The new bill amends the “Act on Capital Market and Financial Investment Business,” which mandates a penalty of up to twice the profits made through unfair trading, such as manipulating stock prices, according to the local news outlet SBS.
The most recent development is noteworthy because it is the first time since the Specific Financial Transaction Information Act that a measure pertaining to virtual assets, or cryptocurrencies, has been created in South Korea.
Apart from market manipulation the new proposal apparently merges 19 crypto-related acts, including defining digital assets and enforcing sanctions for illegal trading methods including exploiting confidential information, among other things.
A fixed-term prison sentence of at least one year or a fine equal to three to five times the amount of profit or loss averted would be imposed for violating this clause.
Additionally, South Korea’s Financial Services Commission has the authority to levy fines double that amount for profits earned through unfair trade.
The core of the revised Capital Markets Act is to impose fines of up to twice the number of unjust gains, in addition to the existing criminal punishment, to criminals who commit three major unfair transactions [stock price manipulation, use of undisclosed important information, and fraudulent illegal transactions].
As per the South Korean report, virtual asset providers would have to deposit and trust customer deposits, sign up for insurance and mutual aid in case of accidents like hacking and computer failure, and create and store records of virtual asset transactions in order to protect user assets.
Governments Of South Korea, Japan, and the U.K Push For Crypto Regulation
This week, governments around the world have made sweeping laws aimed at regulating the digital asset market. A bill governing the regulation of stablecoins and cryptocurrencies in the UK had just been passed by King Charles.
Likewise, the National Tax Agency of Japan has partially updated its corporate tax regulations, introducing new tax regulations for token issuers.
The National Tax Agency revised the law on June 20 to remove the requirement for token issuers in Japan to pay 30% corporate taxes on unrealized cryptocurrency gains.