Crypto Safety Reinforced: South Korea Passes New Law

Crypto Safety Reinforced: South Korea Passes New Law
The South Korean government has taken steps to protect people who invest in cryptocurrencies like Do Kwon's Terra ecosystem. They have passed a new law called the Virtual Asset User Protection Act on June 30. This law aims to regulate unfair practices and safeguard crypto investors.

The new legislation combines 19 different bills related to cryptocurrencies into one, making it easier to understand and enforce. It defines digital assets and sets penalties for illegal activities like using secret information, manipulating the market, and other unfair practices involving cryptocurrencies.

One of the main goals of this law is to apply existing financial market regulations to virtual assets that behave like securities. This will help ensure that people who invest in these assets receive proper protection and that those who engage in unfair practices face consequences and pay for any damages they cause.

To safeguard investors, companies that provide services for virtual assets in South Korea are now required to take responsibility for their users' deposits and offer insurance. This will protect users from potential risks like hacks or computer failures.

Breaking the new rules could lead to imprisonment or significant fines. For instance, the Financial Services Commission can impose a penalty of twice the amount of profits gained from unfair trading practices.

The passing of this law came shortly after Do Kwon, the founder of Terraform Labs, was sentenced to four months in prison in Montenegro for using a fake passport. He also faces an arrest warrant in South Korea for allegedly violating the country's capital markets law.

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