At the plenary meeting of the National Assembly's Political Affairs Committee, a bill concerning the protection of virtual asset users was passed on the 11th.
The bill consolidates and coordinates 19 previously proposed bills related to virtual assets. It defines virtual assets as "electronic certificates that have economic value and can be electronically traded or transferred," but excludes central bank digital currencies (CBDC) from virtual assets.
Additionally, the bill focuses on protecting users. It mandates virtual asset service providers to ▲deposit or trust customer deposits ▲store customer virtual assets of the same type and quantity ▲subscribe to insurance or mutual aid, or accumulate reserves to prepare for incidents such as hacking or system failures ▲create and store virtual asset transaction records.
It also defines the use of undisclosed important information, price manipulation, and unfair trading acts as unfair trading practices, and imposes criminal penalties, liability for damages, and allows for class-action lawsuits in case of violations. The Financial Services Commission may impose fines.
The bill restricts transactions of self-issued virtual assets by virtual asset service providers. It prohibits blocking deposits and withdrawals related to virtual assets without justifiable reasons, requires monitoring for abnormal transactions, and mandates appropriate measures.
The Financial Services Commission is granted authority to supervise and inspect virtual asset service providers. The bill also allows for the establishment of a Virtual Asset Committee to provide advisory services on virtual assets. A new right for the Bank of Korea to request data from virtual asset service providers is also introduced.
Previously, the Political Affairs Committee decided to discuss the legislation in two phases: the first phase focusing on investor protection and the second phase supplementing market order regulations such as virtual asset issuance and disclosure. The bill passed on this day is the first phase legislation. It also includes supplementary opinions imposing legal obligations on financial authorities to prepare for the second phase legislation.
After systematic and textual review by the Legislation and Judiciary Committee, the bill is expected to be finally approved at the plenary session of the National Assembly as early as the 25th.
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