Korea adopts legislation to protect crypto investors

Just over a year after the tragedy Terrathe South Korean Parliament adopted a proposed law on digital assets to strengthen the protection from investors.

The National Assembly of South Korea has just adopted a legislation on crypto, which includes 19 bills related to this new asset class, reports Friday Bloomberg.

The regulations include penalties crypto operators and custodians for violations such as “the use of non-public information, market manipulation and unfair commercial practices”.

The latter requires “insurance coverage, reserve funds and record keeping”. It covers assets such as Bitcoin. Tokens considered securities are subject to the Capital Markets Act, the US news agency points out.

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The entry of new rules in the country comes just over a year after the collapse of the Terra empire founded by the South Korean Do Kwon.

Nearly $40 billion gone up in smoke after stablecoin depeg UST in May 2022. The crash subsequently triggered several large-scale bankruptcies, including that of Singapore hedge fund 3AC.

The alleged fraudster is currently imprisoned in Montenegro. Korea and the US are seeking his extradition.

We welcome the authorities’ attempt to restore order. But the law in general remains stuck in the perspective of traditional finance in terms of crypto regulation, which may suppress the industry rather than promote it,” commented Lee Suh Ryoung, secretary of a local blockchain association, following the passage of the proposed law.

Last summer, Korea announced it was hunting down unregistered foreign crypto-currency exchange platforms that continue to provide services in the country.

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Today, many jurisdictions around the planet are stepping up their efforts to regulate this nascent asset class. The EU approved the MiCA framework earlier this year.

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