In a significant move aimed at curbing crypto-related crimes, South Korea has enacted strict regulations that could result in life imprisonment for individuals profiting more than 5 billion won (approximately $3.8 million) through illicit cryptocurrency activities. The updated Virtual Asset Users Protection Act, introduced by the Financial Services Commission (FSC), seeks to safeguard investor rights, enhance market transparency, and combat fraudulent practices within the crypto sector.
The new legislation, slated to take effect on July 19, 2024, prohibits the exploitation of undisclosed vital information, market manipulation, and illegal trading activities. Violators face severe penalties, including fixed-term imprisonment exceeding one year or fines equivalent to three to five times the amount of illicit gains.
The FSC emphasized its authority to monitor virtual asset businesses, investigate unfair trading practices, and enforce compliance with the Virtual Asset User Protection Act. This regulatory oversight aims to ensure adherence to established guidelines and maintain the integrity of the cryptocurrency market.
The enactment of the Virtual Asset User Protection Act follows a series of industry crises, notably involving Terraform Labs and its founder, Do Kwon. The collapse of the Terra Luna cryptocurrency in May 2022 precipitated significant market losses, prompting legislative action to address systemic vulnerabilities and protect investors from future risks.
Meanwhile, in Thailand, efforts are underway to foster digital asset trading by exempting value-added tax (VAT) on crypto transactions. The Thai Ministry of Finance has suspended the 7% VAT requirement on income derived from digital asset trading, effective since January 1, 2024, in a bid to position Thailand as a prominent digital asset hub.
These regulatory developments underscore the global commitment to regulating the cryptocurrency landscape, promoting market integrity, and safeguarding investor interests in an evolving financial ecosystem.