Cryptocurrency Bill Passes the First Phase in South Korea

The cryptocurrency bill has cleared its first phase raising the hopes of the industry. This will strengthen the financial service commission to regulate by being the regulatory authority for all the crypto firms.

This bill, when it becomes a law, will include many points, like activities that involve halting withdrawals would have to be reported to the Financial Service Commission. The bill defines digital assets as the electronic representation of economic value that can be traded or transferred electronically. It does not include Central Bank Digital Currency (CBDC), other products, and services under South Korea’s Central Bank, which is the Bank of Korea.

The crypto bill makes it compulsory to disclose the investor’s information otherwise fines and strict punishments will be charged. False promotion of crypto assets and price manipulation also come under actions for punishment. The person has to serve a prison time of five years if a crime and fraud worth 5 Billion Korean won is committed.

Proper implementation of the crypto bill would enable companies and stakeholders of the industry to operate securely. A few more steps are left for the crypto bill to be approved in the Legislation and Judiciary Committee. It has already passed the first phase in the National Assembly.

Hwang Suk-Jin, a member of the Digital Asset Special Committee of the Ruling People Power Party expressed optimism about the crypto bill becoming law within a year. Both the ruling and the opposing parties of South Korea are in agreement over the bill. This is one of the reasons for the bill moving ahead to become a law.

Suk-Jin has been sincerely involved in the crypto bill development. He also expressed the hope that the crypto bill would be able to prevent unfair trade acts actively. As of 2020, South Korea has one of the most active cryptocurrency economies in the world. Based on global crypto adoption it has ranked 7th by blockchain data platform Chainalysis. The data further reveals that the country has fallen to 23 on the index due to the collapse of Terra Luna cryptocurrency. The collapse drove legislation in South Korea to develop a legal framework to cover cryptocurrencies. This will add security and protection for the investor.

The next stage of the crypto legislation will focus on the release of crypto tokens by the companies. Their issuance and information disclosure will be included.