Legislators in South Korea passed an initial phase review of proposed cryptocurrency rules that include relatively harsh sentencing recommendations.
South Korean legislators passed an initial phase review of proposed rules that would offer the nation’s Financial Services Commission authority to investigate and handle financial activity related to “ digital assets, ” including cryptocurrency.
The offered bill comes with myriad stipulations governing the sale, storage, and trading of cryptocurrencies, with particular emphasis on consumer security and compliance reporting.
Hwang Suk-jin, a member of the ruling People Power Party’s Digital Asset Special Committee, reported to media outlet Forkast that “ both the ruling and resistance parties have agreed on the matter, ” before suggesting the legislation would become act by the end of the year.
Related: Bank of Korea given right to investigate local crypto firms
If passed, the bill would become one of the most sweeping pieces of national cryptocurrency legislation in existence. It would necessitate exchanges and such service providers to separate internal holdings from user assets, carry insurance and preserve caches in the event of non-market-related losses.
Central bank digital currencies and assets bound straightway to the Bank of Korea are the only reported exceptions.
Businesses and individualities sharing in the cryptocurrency economy in South Korea will similarly be needed to self-report irregularities in order to maintain compliance.
If a business or individual runs afoul of the offered legislation, the commission has included recommendations for penalties that would impose fairly stiff fines.
According to Forkast, the bill contains language pointing that those convicted of infractions resulting in losses lower than roughly $3.75 million, similar to “ breaking to include necessary data in investor exposures, price manipulation and false promotion of crypto assets, ” could face fines in the quantum of three to five times the total losses and up to a year in prison.
Crimes resulting in losses over the $3.75 million mark remarked in the legislation would be punishable with sentences ranging from five years to life in prison.
For comparison, the CEO of Titanium Blockchain, newly convicted in the United States for defrauding consumers for $21 million, took a sentence of four years and three months.
The legislation was published in June 2022, just a month after the collapse of the Terra ecosystem triggered heavy declines in the cryptocurrency sector. Terraform Labs co-founder Shin Hyun-Seong and nine others were afterward indicted by the South Korean government.
(TRISTAN GREENE, Cointelegraph, 2023)