- Tough Measures: Life imprisonment for crypto criminals with illegal profits over five billion won.
- Virtual Asset User Protection Act: Enacted on July 18, 2023, effective July 19, 2024.
- Asset Protection: Businesses must secure 80% of users’ deposits in cold storage.
- Regulatory Oversight: FSC and FSS tasked with supervising and inspecting digital asset businesses.
Crypto Crime Crackdown: Life Imprisonment for Big Offenders
The South Korean government is intensifying its fight against crypto-related crimes with stringent measures under the Virtual Asset User Protection Act. Effective from July 19, 2024, the law mandates life imprisonment for individuals making illegal profits exceeding five billion won. In addition to this, fines equivalent to twice the stolen amount can be imposed. The legislation aims to safeguard crypto investors by holding businesses accountable for protecting users’ deposits. Cryptocurrency businesses are required to store at least 80% of user funds in cold storage, enhancing security against hacks. Regulatory oversight falls under the jurisdiction of the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), empowered to take corrective actions, file complaints, and involve investigative agencies.
Protecting Investors: Asset Security and Regulatory Vigilance
The Virtual Asset User Protection Act places a substantial responsibility on crypto businesses to ensure the safety of users’ assets. Alongside stringent storage requirements, these businesses must refrain from market manipulation, illegal trading, and withholding information on crypto assets. The FSC and FSS play pivotal roles in enforcing compliance, conducting inspections, and taking decisive actions against violations. The South Korean government is committed to building a robust infrastructure to facilitate effective supervision, ensuring a seamless implementation of these measures.