South Korea to enforce tougher crypto law with potential life sentence
Quick Take
- High-level crypto offenders could face severe penalties, including life imprisonment, under the new law.
- South Korea is currently developing a two-part crypto regulatory framework, the first part of which will go into effect in July.
South Korea’s Financial Services Commission (FSC) announced Wednesday that crypto criminals committing illicit market acts could face criminal punishments, including life imprisonment, upon commencement of the country’s new crypto law on July 19.
The FSC said in a Wednesday statement that violations of the new crypto law could lead to at least one year of imprisonment or fines ranging from three to five times the amount of illegal gains. Individuals who earned over 5 billion Korean won ($3.76 million) from such violations could face a life sentence or a penalty of double the proceeds.
In July 2023, the country’s lawmakers passed the “Virtual Asset User Protection Act” with a one-year grace period. The legislation aims to eradicate illicit market acts, such as using undisclosed information for crypto investments, manipulating market prices and engaging in fraudulent transactions.
The act also requires cryptocurrency service providers to safeguard over 80% of deposits in cold storage to protect user funds and enroll in insurance programs for potential user compensation in the event of security breaches.
The new law is part of South Korea’s two-part legislation that seeks to establish a regulatory framework for the crypto industry. The second half of the regulation, currently under development, focuses on standardizing crypto token issuance and information disclosure for investors.
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