The South Korean government strengthens laws to “protect investors in digital assets”: those who earn more than 5 billion won ($3.8 million) from illegal activities risk life imprisonment.
The South Korean government has released an update to the “Virtual Asset Users Protection Act,” a legislative framework aimed at protecting investors against crimes related to the digital asset market. On February 7th, the Financial Services Commission (FSC) announced the new regulations intended to “protect cryptocurrency investors’ rights and promote transparency.”
Enforcement of the legislation
The new law will prohibit the use of “undisclosed important information,” market manipulation, and illegal trading. The legislation will impose criminal penalties and fines for violations, including fixed-term imprisonment of over one year or a fine ranging from three to five times the amount derived from illicit profits.
Effective date and penalty
According to the announcement, the Virtual Asset User Protection Act will come into effect on July 19, 2024, following the law’s approval on July 18, 2023. According to the FSC, criminals who earn more than 5 billion won (approximately $3.8 million) from “illicit cryptocurrency trading schemes” risk life imprisonment.
The authority also added that it will be responsible for overseeing compliance with the law by digital asset operators.
