South Korea’s National Assembly on Friday approved a bill that focuses on guarding the interests of cryptocurrency investors in the country’s first step to make a legal frame devoted to similar digital means, according to the Assembly’s functionary website. The legislation, which translates as the Virtual Asset stoner Protection Act, is anticipated to come into law in a time.
1. The bill, an admixture of 19 proffers from lawgivers, requires crypto service providers to ring- hedge stoner’s means and deposits, to have insurance, to hold a portion of reserves in offline cold holdalls. In case of hacks or system failures, and to maintain records of all deals.
2, The legislation includes penalties for price manipulation, false creation of crypto means, and failing to give required information on investors. Penalties for those condemned include a minimum of one time in captivity, or a forfeiture of three to five times the quantum of gains earned from similar violations.
3. The bill defines “ virtual means ” as an “ electronic representation of an profitable value that can be traded or transferred electronically. ” The bill excludes the central bank digital currency( CBDC) under the Bank of Korea, the country’s central bank.
4. The legislation, still, does give the Bank of Korea the right to request data from cryptocurrency platforms, a right it had been arguing for with the country’s fiscal controllers. The bank has stated the cryptocurrency request could have a significant impact on fiscal and financial stability and hence it needs some oversight.
5. In an interview with Forkast in May, Hwang Suk- jin, a Ruling People Power Party’s Digital Asset Special Committee member said the proposed bill will establish the legal rights for virtual asset druggies and produce a safer and further dependable request for cryptocurrencies.
6. As of 2020, South Korea had one of the most active cryptocurrency husbandry in the world, ranking 7th worldwide on the Global Crypto Adoption Index collected by blockchain data platform Chainalysis.
7. Still, the country fell to 23 on the indicator in 2022, the same time as theUS$ 40 billion collapse of the Terra- Luna cryptocurrency and stablecoin that was launched in the country and caused massive losses to hundreds of thousands of investors. Anyhow, the Upbit crypto exchange in South Korea remains the world’s third largest by trading volume, according to CoinMarketCap data.
8. The Terra- Luna debacle helped drive legislation in South Korea to establish a legal frame to cover cryptocurrencies, fastening first on investor protection. The coming stage of crypto legislation is anticipated to concentrate on rules for original companies in token allocation and information exposure.