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.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 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

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

TAPEDRIVE says it can make Solana data storage 1,400x cheaper

article-image

Immigration changes are papering over a fragile labor market

article-image

BlueYard’s head of crypto research developed FreePay to make fee-free, tap-to-pay crypto payments a reality

article-image

Buzzwords include: succinct universal proofs, zkVM, incrementally verifiable computation, distributed supercomputer and agentic AI

article-image

US dollars might technically be worth less, but it’s still good news

article-image

Apps are doing well, as is casino gaming, says Tom Schmidt of Dragonfly