South Korea Introduces Crypto-Centric Law to Curb Market Crimes; Thailand Exempts VAT on Digital Asset Trading
Summary:
South Korea's government introduced updated changes to the Virtual Asset Users Protection Act to protect investors from fraudulent market activities. The Financial Services Commission announced the law, which prohibits using undisclosed important information about crypto, illegal trading, and market manipulation. It has heavy penalties, including over one-year imprisonment or hefty fines. The law was passed following the Terra Luna cryptocurrency collapse, which wiped $450 billion from the market. Meanwhile, Thailand's Finance Ministry announced a VAT exemption on digital asset trading to promote Thailand as a digital asset hub.
South Korea's government has introduced updated modifications to the Virtual Asset Users Protection Act that are crypto-centric and designed to safeguard investors from fraudulent market activities. The Financial Services Commission (FSC), the country's leading financial overseer, announced this change on February 7. This new law is aimed at securing the rights of crypto investors as well as fostering transparency.
The new crypto legislation in South Korea squarely prohibits the utilization of "confidential crucial information" concerning crypto, illicit trading, and market exploitation. Major penal repercussions, including imprisonment for more than a year or financial penalties equivalent to three to five times the amount of illegal earnings, are included in this law.
Following the law's passage on July 18, 2023, the Virtual Asset User Protection Act is predicted to be enacted on July 19, 2024, according to the FSC. Any individual found guilty of illicit crypto trading activities amounting to more than 5 billion won (equivalent to $3.8 million) will be facing lifelong imprisonment.
The FSC has also stated its authority to oversee and inspect virtual asset business conduct, as well as investigate and discipline unjust trading practices under this law. Furthermore, the regulator has the mandate to ensure virtual asset business operators adhere to the Virtual Asset User Protection Act.
South Korea's Virtual Asset User Protection Act was approved by lawmakers in June 2023 in response to a major financial debacle involving Terraform Labs and its founder Do Kwon, a South Korean national. This was set in motion by the May 2022 market wipeout of more than $450 billion following the collapse of Terra Luna Cryptocurrency.
Currently, Do Kwon is facing extradition to the United States and is charged with eight counts, which include commodities fraud, wire fraud, security fraud, and conspiracy to engage in market manipulation.
In other Asian news, the Finance Ministry of Thailand declared that value-added tax (VAT) on digital asset trading will be exempted, as reported by the Bangkok Post on February 7. This move, which eliminates the obligation to pay a 7% VAT on crypto-earned income starting January 1, 2024, with no lapse date, aims at propelling Thailand towards becoming a digital asset hub.
Published At
2/7/2024 11:10:27 AM
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