The South Korean government is taking steps to protect cryptocurrency investors from implosion like Do Kwon’s Terra ecosystem by passing a new crypto bill.
On June 30, Congress passed the Virtual Asset User Protection Act.The bill aims to regulate unfair trade practices and protect cryptocurrency investors, local news agency SBS Biz reported. report.
According to reports, the legislation to integrate 19 cryptocurrency-related bills that provide a unified bill to define digital assets and impose penalties for illegal trading activities in cryptocurrencies such as the use of undisclosed information, market manipulation, and other unfair trading practices.
According to local media reports, the gist of the Act on the Protection of Virtual Asset Users is to first apply the Capital Market Act to virtual assets that are securities in nature. The legislation also aims to lay the groundwork for penalties and liability for damages caused by unfair cryptocurrency transactions.
To protect investors, virtual asset service providers (VASPs) in South Korea are now required to be responsible and provide insurance for users’ deposits, according to reports. Such measures are necessary to protect users from hacker attacks, computer failures and other risks.
According to SBS Biz, violating the new regulations will be punished with more than one year in prison or heavy fines. For example, the Financial Services Commission can impose fines equal to double the amount of profits gained from unfair trade.
related: Do Kwon denies forging passports, blames ‘Chinese’ agency: report
The news comes shortly after Terraform Labs founder Do Kwon was sentenced to four months in prison by a Montenegrin court for using a fake passport. The executive also faces an arrest warrant in South Korea for allegedly violating South Korea’s capital market law.
South Korean prosecutors recently claimed that the Terra token crash was the largest case of financial fraud or financial securities fraud ever committed in the country.
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