South Korea’s National Assembly has officially approved new legislation to protect users of virtual assets and amend the country’s capital market law. It prohibits unfair business practices and provides user protection.
The “Capital Market and Financial Investment Law” has also been amended to impose penalties of up to doubling profits resulting from unfair trading, such as stock price manipulation.
This is the first time that specific measures have been introduced to address cryptocurrencies after the enactment of the Specific Financial Transaction Information Act.
The Virtual Asset User Protection Act aims to establish a framework for imposing fines and liability for unfair trading of virtual assets, local sources said. Asian Reports. It applies the regulations stipulated in the Capital Market Law for virtual assets with characteristics similar to securities.
Virtual asset providers are now required to keep records of virtual asset transactions, insure customer deposits through deposits and trusts, obtain insurance coverage, and participate in mutual aid programs to mitigate potential losses from hacking or system failure.
Engaging in unfair business practices, concealment of relevant information, artificially inflated prices, and illegal business transactions can result in fines of three to five times avoided profits or losses. The Financial Services Commission has the power to impose penalties equal to twice the amount of illicit profits.
Further, the amended Capital Markets Act states that individuals involved in three major unfair transactions, stock price manipulation, use of material undisclosed information, fraudulent and illegal transactions, may face fines up to twice the number of unfair gains and criminal penalties. potential.
Previously, there was no unified method for calculating the amount of ill-gotten profits. This has been addressed by defining “illegal earnings” as “total income minus total expenses”.
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In cases where share price manipulation is detected, but improper gains are not made, or the amount cannot be determined, a fixed fine of 4 billion won has been set.
The amendment of the Capital Markets Law gained momentum in the wake of the drop in share prices of SG Securities, prompting the financial authorities to demand more severe penalties and penalties for unfair gains.
