The collapse of the Terra ecosystem last Spring did not just wreak havoc in the crypto market. It also did the job of alerting regulatory bodies around the world about the massive risks involved in this industry.
Since then, a lot of regulatory authorities in the world have ramped up their efforts of regulating the crypto market in their respective jurisdictions.
The legislators in South Korea are also part of this category, as they have also been working on it and now intend to introduce legislation aimed at protecting those who invest in virtual assets, meaning digital currencies.
Moreover, they also intend to introduce harsh penalties for those who are involved in unfair trading acts in the crypto industry.
Local media reports have revealed that the National Assembly and the Financial Services Commission (FSC) in South Korea are working on passing a bill related to the crypto space.
The bill in question would allow financial authorities to keep track of and punish any unfair trade practices, which include price manipulation, the use of personal information and fraud.
They would also monitor and track the activities of crypto exchanges in this regard. This legislation is undoubtedly the most important because it would provide investor protection to crypto industry participants from 2023.
The National Assembly of South Korea already has about 14 different proposals related to cryptocurrencies and digital assets circulating.
Likewise, there is also another law by the name of the Digital Assets Basic Act, which is quite comprehensive and ambitious, in the works.
However, not of them will offer the same protection that this new bill can provide. A National Assembly official said that the Securities and Exchange Commission (SEC) in the US enjoys a wide range of powers.
Therefore, it has the authority to punish unfair trading in virtual assets without needing separate legislation, but the same does not apply to Korea.
The unnamed official said that they have to have related legislation.
There have been no details about the specific penalties that will be applicable for different malpractice.
But, it is expected that they will be designed in a manner that synchronizes with the punishment and supervision at a level similar to what is associated with the traditional financial industry.
In September, authorities in South Korea also issued an arrest warrant for Do Kwon, the co-founder of Terra, but it had later been dismissed.
A Red Notice had also been issued by Interpol for Kwon, which means law enforcement has been asked to locate and possibly detain Do Kwon.
The foreign ministry of South Korea also issued an order on October 6th to the co-founder of Terra in which he was asked to surrender his passport, or else they would cancel it.
The FSC in South Korea also announced at the end of October that they would begin monitoring crypto whales who own assets of more than 100 million won.
This is to ensure that digital assets are not used for any money laundering activities.