- Final work could be completed this year
- The country is introducing a set of rules and penalties for market participants
South Korea’s National Assembly has held its first round of reviews of digital asset legislation.
This is a package of rules that regulates the blockchain industry, but introduces a number of strict restrictions.
The bill defines virtual assets as “an electronic representation of economic value that can be sold or transferred electronically.”.
However, it imposes a ban on central bank digital currency (CBDC) or other crypto services involving the Bank of Korea, the country’s central bank.
The government requires crypto service providers to keep user assets and deposits separate from their assets.
Firms must take out insurance that will provide payments in the event of a hack or system failure. And also keep records of all transactions.
South Korea is introducing criminal penalties for failing to include necessary information to investors, manipulating prices and promoting fake tokens.
The punishment for consumers who cause more than 5 billion Korean won ($3.73 million) in damages is an increase from five years to life in prison.
The local regulator, the Financial Services Commission, will oversee the activities of cryptocurrency companies.