South Korea Passes First Phase of Crypto Regulation Bill
• South Korea has passed the first phase of its cryptocurrency bill review in the National Assembly.
• The Legislation and Judiciary Committee must approve the bill before it can become law, but it is expected to pass later this year.
• The new regulations will create a safer and more secure trading environment for investors, as well as help prevent money laundering and other illicit activities that may have been taking place in the crypto market.
Clarity & Consistency
The new cryptocurrency bill will bring clarity and consistency to South Korea’s cryptocurrency market, which had been operating in a largely unregulated environment so far. Regulations outlined in the bill include mandates such as requiring service providers to maintain user assets and deposits separately from their own assets, have insurance, hold reserves for contingencies such as hacks or system failures, and record all transactions.
Illegal Activities Prohibited
The bill also prohibits certain illegal activities such as failing to include necessary information in investor disclosures, engaging in price manipulation, or promoting crypto assets falsely. Anyone convicted of these offenses will face penalties including fines or imprisonment depending on the severity of the offense.
Exclusion Of Central Bank Digital Currencies
The legislation specifically excludes central bank digital currencies (CBDC) or any other services that fall under the purview of the Bank of Korea, arguing that they are not “virtual assets” according to its definition. This means that any services related to CBDCs remain outside of this initial regulation framework proposed by South Korean lawmakers.
Hwang Suk-jin’s Statement
Hwang Suk-jin from People Power Party commented on this news saying: “As both the ruling and opposition parties have agreed on the matter, the legislation will become law within the first half of 2021.”