Home Crypto News South Korea Increases Crypto Regulation

South Korea Increases Crypto Regulation

07 Feb, 2024 Crypto News

South Korea Increases Crypto Regulation

The South Korean government has introduced an updated version of the Virtual Asset Users Protection Act, implementing regulations focused on cryptocurrencies to safeguard investors against market malpractices.

On February 7th, the Financial Services Commission (FSC), South Korea's principal financial regulator, unveiled the new law, aiming to safeguard the interests of crypto investors and foster transparency.

The new crypto legislation in South Korea prohibits the utilization of "undisclosed significant information" concerning cryptocurrencies, market manipulation, and illicit trading.

It enforces severe penalties and fines for breaches, including imprisonment exceeding one year or fines ranging from three to five times the amount of illicit profits.

The Virtual Asset User Protection Act is slated to take effect on July 19, 2024, subsequent to its enactment on July 18, 2023, as announced by the FSC.

According to the FSC, individuals making over 5 billion won (approximately $3.8 million) from illicit crypto trading activities could face life imprisonment.

Furthermore, the regulator emphasized its authority to oversee and inspect virtual asset business operators and to investigate and take measures against unfair trading practices, as specified in the law.

It also asserted its competence to supervise the compliance of virtual asset business operators with the Virtual Asset User Protection Act and conduct inspections on their business operations and status.

The enactment of the Virtual Asset User Protection Act followed South Korean lawmakers' approval in June 2023.

The legislation was prompted by a significant industry collapse involving Terraform Labs and its founder, Do Kwon, a South Korean national.

This collapse, occurring in May 2022, resulted in the market losing over $450 billion.

Kwon faces extradition to the United States, where he is charged with eight offenses, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and manipulate markets, rather than facing charges in South Korea.

In other developments in Asia, Thailand's Ministry of Finance announced the exemption of value-added tax (VAT) on digital asset trading, aiming to propel Thailand towards becoming a digital asset hub, according to a report from local news agency Bangkok Post on February 7th.

The regulator decided to ease tax regulations by suspending the requirement to pay 7% VAT on income derived from cryptocurrencies, effective from January 1, 2024, with no specified expiration date.

Sources:

https://cointelegraph.com/news/crypto-criminals-south-korea-life-imprisonment

https://www.bangkokpost.com/business/investment/2737569/crypto-trading-becomes-vat-free-in-race-for-digital

https://www.fsc.go.kr/no010101/81680

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