South Korea Introduces Tough Penalties for Crypto Crimes Under New Law, Including Life Imprisonment

South Korea Introduces Tough Penalties for Crypto Crimes Under New Law, Including Life Imprisonment

Crypto News – South Korea’s Financial Services Commission (FSC) has declared that individuals involved in illicit activities within the crypto market could face severe criminal penalties, including life imprisonment, once the country’s new crypto law comes into effect on July 19.

According to a statement released by the FSC on Wednesday, violations of the forthcoming crypto regulations could result in a minimum of one year in prison or fines ranging from three to five times the amount of illicit gains. Those found guilty of earning more than 5 billion Korean won ($3.76 million) through such violations may face either a life sentence or a penalty equivalent to double the proceeds.

In July 2023, South Korea‘s legislators passed the “Virtual Asset User Protection Act” with a one-year transitional period. The primary objective of this legislation is to eliminate illicit activities in the crypto market, including the misuse of undisclosed information for crypto investments, market price manipulation, and fraudulent transactions.

Furthermore, the act mandates that cryptocurrency service providers must store at least 80% of user deposits in cold storage to ensure the protection of user funds. These providers are also required to enroll in insurance programs to compensate users in the event of security breaches.

This new law is a crucial component of South Korea‘s comprehensive regulatory framework for the crypto industry. The second phase of this regulation, which is currently in development, focuses on standardizing the issuance of crypto tokens and ensuring transparency in information disclosure for investors.