In a sudden turn, South Korean Parliament has passed a new legislation titled “Virtual Asset User Protection” bill that implies to the crypto industry. The conditions proposed under this bill aim to prevent any collapses like that of Terra LUNA.
According to local media reports, the newly passed legislation prioritises investors safety and prevent incidents that jeopardise customers’ funds. Further, the laws aim to address concerns of market manipulation and unfair trading practices.
Additionally, the much-needed and awaited legislation brings crypto under the jurisdiction of the Financial Services Commission (FSC), which will supervise crypto service providers. These custodians include exchanges and custodians.
As per the new law, digital asset firms are required to fulfill conditions. The conditions for these digital assets companies include the need to insure customer funds, hold a certain percentage of reserve capital, and keep necessary records.
While the newly passed gives FSC the primary authority to regulate the crypto industry, the Bank of Korea (BoK) has made efforts to ensure ample investors’ protection in regard to virtual assets. The central bank insisted on and has been given the power to investigate cryptocurrency-related businesses and request transaction data from crypto exchanges.
Currently, as crypto regulation is on the table for countries across the globe, alarmed by the increasing crimes and threats in the crypto sector, the South Korean regulators expressed their desire to expedite the regulation of stablecoins after being affected by the crash of the tokens. Additionally, the rise in crypto-powered drug trafficking after a large number of narcotics-trading teens were handed jail time, Yoon Seok-yeol, president of South Korea, called for all the agencies to work in unison.
Notably, some say that with this new bill, South Korea is firmly positioning itself to compete with its Asian rival Hong Kong in attracting crypto investors. Despite closing on the leniency, Hong Kong’s new digital asset laws continue to provide companies with a solid base for operating in the region.
In the recent times, Asia has been emerging as a very strong market for cryptocurrencies while the shine of the US dims a little in the face of the regulator crackdown. Several crypto experts have predicted that Asia could potentially spur next bull market.