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

Flashnote Template Presentation (2).jpg

Research

With the recent election, it’s clear that there will be a meaningful shift in crypto regulations and legislation. Trump is likely as pro-crypto as a president can be. He launched (multiple) of his own NFT collections and is launching an Aave wrapper called World Liberty Fi. He has also spoken out and mentioned that he wants to make the United States "the crypto capital of the planet" and transform it into the "Bitcoin superpower of the world". He proposed creating a strategic national Bitcoin stockpile alongside support from Senator Cynthia Lummis, promising to retain 100% of all Bitcoin held by the U.S. government. More importantly, we’re likely to see deregulation across the board in a lot of industries, with crypto being one of them - as Trump has committed to keeping the crypto market largely unregulated. Crypto, DeFi in particular, has historically been knee-capped by overreaching and hostile governmental agencies and regulation by enforcement, as evidenced by the plethora of Wells notices and lawsuits over the past few years. With Donald Trump winning the presidency, Republicans taking control of the Senate, and being on the verge of securing the House, we think it’s likely that crypto realizes positive regulatory clarity. Below, you can find our analysts’ takes:

article-image

Solana is the crowd favorite to potentially flip Ethereum somewhere down the line, and it tends to feel realistic at times

article-image

Of course, a lot has happened since the 600+ survey respondents shared their thoughts between Aug. 15 and Oct. 1

article-image

AI’s future shouldn’t be decided by a handful of tech giants

article-image

A look at software wallet Exodus may show how an SEC shakeup could have a real impact on industry companies

article-image

Co-chairing Trump’s transition team to help fill administration positions is Cantor Fitzgerald CEO Howard Lutnick

article-image

Reflect is a delta-neutral currency protocol that lets tokens accrue yield without touching the banking system