[NEWS] Cryptocurrency criminals may face life imprisonment; South Korea to implement cryptocurrency law in July

The Financial Services Commission (FSC) announced on the 7th that the "Cryptocurrency User Protection Act" will come into force on July 19th of this year, and criminal penalties, including life imprisonment, may be given to criminals who commit illegal acts.

According to the announcement, the law will be enacted to protect cryptocurrency users and establish order in the cryptocurrency market. It stipulates specific criminal penalties or fines for market manipulation, illegal trading, and the use of undisclosed important information about cryptocurrencies.

The law is being introduced in response to the 2022 "Terra Luna" incident involving Terraform Labs and its co-founder Do Kwon, and was passed in July last year.

Aimed at establishing a regulatory framework for the cryptocurrency industry, the law to be enacted this time will be part of a two-part law. The other part, which is currently being formulated, is said to focus on standardizing the issuance of cryptocurrencies and information disclosure to investors.

Possible life imprisonment

According to the announcement, the law provides for a maximum of one year in prison or a fine equivalent to three to five times the amount of the illegal profits. Depending on the amount of illegal profits (5 billion won or more), the maximum sentence may be life imprisonment. The law also gives the authority to impose fines equivalent to twice the amount of the illegal profits.

Cryptocurrency service providers will be required to store more than 80% of the cryptocurrency they hold in cold wallets to protect users' funds and to take out insurance to compensate users in the event of a security breach.

In addition, to ensure the protection of users' funds, banks will be designated as management offices, and offices with social credibility will handle the assets held in custody.

In addition, company operators will be required to be responsible for hacking and other incidents and must meet certain requirements outlined within the supervision regulations.

According to the announcement, the FSC also allows for cooperation with the Financial Supervisory Service in investigating unfair transactions. If illegal activities are found, the FSC can suspend operations, issue corrective orders, file charges, and notify investigative agencies.

Crimes against Japanese people by Koreans are on the rise. We hope that this law will reduce the number of Japanese victims.

Reference:Announcement
Image: Shutterstock

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