South Korea joins the League of Nations proposing stiffer laws and penalties for crypto frauds. The country has two major legislations that will be lawfully passed before or by 2023.
Asides from the Digital Asset Basic Act, South Korean legislators are working towards an investor protection bill. The bill will stiffen the penalties for unfair acts and illegal crypto-related trades.
The legislation is a joint effort by the Financial Services Commission (FSC) and the National Assembly. It will enable financial authorities to monitor and punish unfair trade practices. Acts such as price manipulation and fraud while supervising crypto exchanges would have stringent penalties.
Experts say this legislation bears an emergent character—it is expected to guarantee investor protection and strike fear in fraudsters.
It is worthy of note that aside from the comprehensive Digital asset basic act and this latest legislation, there are 14 others in the national assembly.
There are no extensive details of this new legislation, like the previous ones. The various fraudulent activities and their punishment have not been made public. However, there is the likelihood that the punishment will be extremely harsh and will cover more fraudulent acts.
At this juncture, it is expedient to identify how Korea has been cracking down on illegal activities in the crypto space.
In August, the Korean Financial intelligence unit discovered and reported 16 unregistered crypto service providers. They were foreign-based and operating illegally in Korea. The list of these firms included KuCoin, Phemex, and Poloniex.
The Korea Financial intelligence unit (KoFIU) said these firms were operating without due registration. It said they were urged to register since July last year but refused. Therefore, their activities became illegal.
The Korean government said it would take legal action and report the 16 firms to investigative authorities. It said the Korea communications commission and Korea communications standard commission would block domestic access to their website.
Other punishments include five years imprisonment, civil penalties of up to $37,000, and a permanent registration ban in Korea.
Korean authorities' effort to harshen crypto penalties took a bigger twist since the Terra collapse in March. The collapse saw the loss of about $40 billion in investment in the Terra protocol.
Terra form Lab and its Korean co-founders have been subjected to investigation. Interpol has added Do Kwon to its Red Notice list.
These efforts and more legislation will help reduce crypto fraud and increase investors' confidence in the country.
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