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

The new legislation also gives the Bank of Korea oversight of digital asset operators

article-image

Allexxandar/Shutterstock modified by Blockworks

share

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.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

RTK networks are critical to enabling a world of ubiquitous autonomous drones, vehicles, and industrial robots. We believe the GEOD token enables both a cost and product advantage for the GEODNET RTK network, which will allow it to out-compete multi-billion dollar incumbents Trimble and Hexagon.

article-image

As EIP-4844 “blobs” transform the economics of Ethereum layer-2s, a growing debate pits long-term scalability against immediate ETH value

article-image

Prosecutors argued that FTX co-founder Gary Wang cooperated in their case against former FTX CEO Sam Bankman-Fried

article-image

The two largest crypto exchanges respectively run the second- and sixth-largest Solana validators

article-image

MicroStrategy’s bitcoin buying has exploded — it now holds 1.7% of the asset’s circulating supply

article-image

The MiCA era will reward the prepared and punish the rest

article-image

The market is, presumably, confused about what a Trump win means for the social media company