South Korea passes crypto legislation to crack down on ‘illegal trading practices’

South Korea’s parliament passed the Virtual Asset Protection Act on Friday in a plenary session.

The legislation makes market manipulation illegal, and aims to crack down on insider trading — or trading using undisclosed information. 

The bill “can impose a penalty of up to twice the amount of profits gained or avoided losses due to unfair trading practices in the capital market, such as the use of undisclosed material information, manipulation of market prices, and illegal trading practices. content to make it happen.”

The passing of the legislation paves the way for the Financial Services Commission to oversee both digital asset operators and asset custodians. It also requires virtual asset operators to be insured in case of a hack, and keep records of digital asset transactions. And it will give the Bank of Korea the ability to probe digital asset companies.

The bill follows another — passed in late May — requiring lawmakers to disclose crypto assets following a political scandal. 

Earlier this year, South Korean politician Kim Nam-kuk faced an investigation from his own politcial party after it was reported that he owned roughly $4.5 million in wemix coins. Though Blockworks was not privy to Nam-kuk’s holdings, he was reported to have a number of undisclosed positions.

This led to his resignation, and authorities reportedly raided Upbit and Bithumb, where he stored his digital wallets.  

South Korea is also attempting to extradite Do Kwon — who was recently sentenced to four months in a Montenegro jail for falsifying a passport — for his role in the collapse of the algorithmic stablecoin Terra. 

The collapse led to investors losing millions, and created the domino effect that caused Celsius, Voyager and Three Arrows Capital to declare bankruptcy.

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