Crypto regulation is gaining momentum in South Korea as lawmakers seek to impose stricter rules on digital assets in response to a shocking murder case linked to cryptocurrency.
In a tragic incident reported by Bloomberg, a Korean woman was kidnapped and subsequently killed in what appears to be a dispute arising from losses related to crypto.
The gravity of the crime, which reportedly took place late March, has placed the spotlight on the efforts of lawmakers to expedite the country’s inaugural standalone crypto bill, which may soon undergo a parliamentary vote, potentially as early as this month.
The incident has underscored the need for comprehensive regulatory measures to address the risks and challenges associated with the burgeoning crypto industry.
On Focus: Virtual Asset User Protection Bill
This event has prompted lawmakers to accelerate the passage of the nation’s inaugural standalone crypto bill, known as the Virtual Asset User Protection Bill, which consolidates 19 different crypto-related measures into a single comprehensive legislation.
A draft version of the bill, obtained by Bloomberg, reveals that it aims to establish precise legal definitions for virtual assets and introduce penalties for offenses such as insider trading and market manipulation.
Furthermore, the proposed legislation seeks to grant the Financial Services Commission in South Korea the authority to supervise cryptocurrency companies and oversee the custody of digital assets.
Different Regulatory Paths For Crypto, Securities Tokens
Under the new rules, cryptocurrencies like Bitcoin will be subject to the proposed regulations, while tokens categorized as securities by the government will continue to be governed by existing capital-markets laws.
By establishing clear guidelines for digital assets, South Korea aims to fortify the resilience of the crypto industry and protect investors from potential risks.
The bill’s provision for mandatory insurance coverage aims to provide a safety net for digital asset firms, shielding them from financial losses in the event of cyberattacks or breaches.
Additionally, the stricter rules on reserve funds and account keeping seek to ensure greater transparency and accountability within the cryptocurrency ecosystem.
The introduction of the Virtual Asset User Protection Bill comes at a crucial moment for South Korea as the nation grapples with growing apprehension surrounding the crypto industry.
Recent events, including the financial crimes committed by Do Kwon, co-founder and CEO of Singapore-based Terraform Labs, and the collapse of the Terra ecosystem, have heightened concerns and shed light on the urgent need for robust regulatory measures.
-Featured image from Showmetech