Crypto News– The South Korean government is intensifying efforts to safeguard crypto investors from unfair market practices and criminal activities by implementing stricter fines and penalties for breaches of specific regulations.
Korean Crypto Criminals Face Life Imprisonment if Found Guilty of Stealing Above This Sum?
As outlined in a recent press release, individuals involved in crypto-related crimes could potentially face imprisonment exceeding one year or fines ranging from three to five times the amount stolen. Moreover, depending on the severity of the offense, those illicitly profiting over five billion won ($3.8 million) may be subject to life imprisonment or a fine double the stolen amount.
Cryptocurrency Offenders May Receive Life Sentences
The new regulations form part of the Virtual Asset User Protection Act, slated to take effect on July 19, 2024. This legislation was officially passed by the government on July 18, 2023.
Under this law, the assets of cryptocurrency users and investors receive enhanced protection. Crypto businesses are entrusted with safeguarding users’ deposits, which are to be managed by institutions with a proven track record of regulatory compliance, stability, and robust management systems, such as banks.
To mitigate the risks posed by hacks and system failures, crypto firms are required to store a minimum of 80% of users’ deposits in cold storage. Additionally, these businesses must proactively prepare for potential breaches by either obtaining insurance coverage or establishing a reserve fund with a predefined compensation limit.
Furthermore, crypto business operators are prohibited from withholding information regarding crypto assets, engaging in market manipulation, or participating in illegal trading activities. These measures aim to bolster transparency and integrity within the cryptocurrency ecosystem, promoting trust and confidence among users and investors alike.
The Supervision of FSC and FSS in Focus
Moreover, the newly enacted law entrusts the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) with the responsibility of overseeing and scrutinizing digital asset enterprises to identify and address any breaches.
“The Financial Services Commission is empowered to monitor whether virtual asset businesses adhere to the Virtual Asset User Protection Act and assess their operational and asset status. As per the delegation of authority outlined in the Enforcement Decree (draft), inspection activities will be conducted by the Financial Supervisory Service,” the statement clarified.
The FSC and FSS possess the authority to implement various measures, including suspending operations, mandating corrective actions, lodging complaints, and informing investigative bodies and the prosecutor general about any violations of the Protection Act by crypto businesses.