South Korea mulls new stricter framework for cryptocurrencies

South Korea wants to further regulate the crypto industry in order to avoid new disappointments, such as, in particular, the Terra project.

Commissioned by the South Korean federal government, the report recommends that the national cryptocurrency industry adopt a stricter system for exchanges and token creators to protect investors. The report, proposed by the Financial Services Commission (FSC) to the National Assembly, also called for new laws to reduce the impact of insider trading, pump-and-dump and fictitious trading.

South Korea wants to further regulate the crypto industry

These new laws will be stricter and the penalties for refusal will be harsher than those set out in the Capital Markets Law, which currently governs the crypto industry in the country. The Virtual Property Industry Law Benchmarking Report obtained by Korea Economic Daily contains a recommendation for a system to be applied to coin creators such as ICO companies and crypto exchanges. Depending on the level of risk, different levels of regulation will be offered.

Adjusting corner masters with a reliable system is today considered the “most needed protection”on the market. This position is largely due to the market collapse that began with the fall of the Terra project, whose South Korean founder Do Kwon also needs to be heard by the National Assembly.

to avoid new frustrations such as the Terra project in particular

Among the proposals would be to require coin creators to submit to the FSC a white paper detailing the project and details on the various players, how they intend to use the funds raised from the ICO, and what the associated risks are for the project. Updates to this whitepaper should be made at least seven days before the proposed changes become effective. And even overseas-based companies that want to list their tokens on Korean exchanges must qualify.

The report also aims to help curb the shady activities that local exchanges and coin makers have long been accused of. A number of proposals are being made to mitigate the effects of insider trading, price manipulation, pump and dump, fictitious trading, and industry standard transaction fees.

In April, Cointelegraph reported that some local players had acknowledged for some time that the Capital Markets Act was not appropriate to govern the crypto industry. The new president of South Korea, Yoon Seok-yeol, was elected, in part, due to his desire to better understand and control the crypto industry. On May 3, he stated that his mandate would be to extend the tax-exempt status of income from investments in cryptocurrencies until a proper legal framework is in place.