The Financial Services Commission (FSC) of South Korea has proposed making purposeful acts aimed at influencing the price of crypto assets criminally punishable, according to the announcement by Coindesk.
The FSC asked the National Assembly of the Republic to introduce a provision in the cryptocurrency regulatory framework to criminalise those who manipulate the cryptocurrency market and engage in insider trading.
According to the FSC guidelines, the minimum punishment for such individuals could be one year in prison and fines of three to five times the illicit profits made. However, for illegal profits exceeding 5 billion won (~£3.2 million), the penalty can be five years in prison.
Kim Byeong-wook, secretary of the Democratic Party of Korea on the National Assembly’s Political Affairs Committee, said there is an urgent need to regulate the cryptocurrency market. In his view, investors should be protected first and foremost: “There have already been enough studies and discussions on the law on virtual assets. Investor protection is the most important thing in the cryptocurrency market,” said Kim Byeong-wook.
In addition, the regulator proposed to impose taxation on certain types of non-transferable tokens (NFT), despite the earlier announcement that all NFTs would be exempt from taxation. In a separate statement, South Korea’s Game Rating and Administration Committee reminded of the continued ban on NFT games. Authorities fear that such projects may cause gambling addiction among teenagers.
The existing Act on Reporting and Use of Certain Financial Information is mainly focused on combating money laundering in the crypto industry. The National Assembly has therefore instructed the Commission to prepare a comprehensive bill on the cryptocurrency industry within one month. The law will probably not be ready for the last parliamentary meeting of the year on 9th December 2021.
The FSC also proposed the creation of a legal association to self-regulate disputes in the crypto industry.
Earlier it was reported that South Korea may introduce an income tax on cryptocurrencies after the presidential election. While NFTs were previously excluded from the cryptocurrency tax law, The FSC’s vice chairman Doh Kyu-Sang insists that collectible tokens should also fall under the law.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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