South Korea Passes First Domestic Law Dedicated to Virtual Assets
South Korea has approved its first standalone digital-asset bill aimed at enhancing investor protection. The move comes more than a year after the $2 trillion cryptocurrency market collapse caused by South Korean entrepreneur Do Kwon.
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During a plenary session, the National Assembly voted in favor of the Virtual Asset Use Act, with 265 votes in favor, no votes against, and 3 abstentions out of 268 votes cast.
The initial section of the law provides a definition of virtual assets as digital tokens with economic value that can be sold or transferred. Notably, Central Bank Digital Currency (CBDC) is excluded from this definition.
The legislation also outlines regulations that virtual asset operators must adhere to in order to safeguard user assets. This includes maintaining transaction records and implementing measures such as insurance, deduction, or reserve accumulation to mitigate risks associated with hacking and system failures.
Furthermore, the law identifies unfair trade practices, such as the use of concealed key information, market price manipulation, and counterfeit business methods. Violations of these regulations can result in criminal penalties, civil liability, and the possibility of initiating a class-action lawsuit.
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