Prosecutors Focus on Blocking Unfair Trade Practices
From now on, those who gain unfair profits through unfair virtual asset transactions will face penalties of up to life imprisonment. The Virtual Asset User Protection Act will be fully enforced starting from the 19th. As the virtual asset market, which has been virtually a blind spot, comes under the full scope of the law, authorities are expected to strengthen their monitoring of unfair trading.
Seoul Southern District Prosecutors' Office (left) and Financial Supervisory Service [Image source=Yonhap News]
The enforcement of the Virtual Asset User Protection Act, enacted last July and after a one-year grace period, is significant in that it establishes legal grounds for punishment against unfair virtual asset trading. If the profits gained or losses avoided through unfair trading amount to 5 billion KRW or more, the punishment ranges from a minimum of 5 years to a maximum of life imprisonment. Even if the loss amount is between 500 million KRW and 5 billion KRW, the statutory penalty is imprisonment for 3 years or more.
Types of unfair trading activities such as using undisclosed information and price manipulation are also specifically stated in the law. Operating so-called ‘leading rooms’ through social media may also fall under the Virtual Asset User Protection Act. The basic framework of these penalty provisions is similar to the Capital Markets Act, which mainly deals with stock-related crimes.
According to financial authorities, the number of domestic virtual asset investors was approximately 6.45 million as of the end of last year. Considering that the number of domestic stock market investors, with a history of over 70 years, is about 14.16 million, virtual asset investors have rapidly increased to nearly half the number of stock investors in just a few recent years.
Going forward, stronger penalties will be possible based on the Virtual Asset User Protection Act. The financial authorities stated, "From the early stages of the law’s enforcement, we plan to strictly take consistent actions against major unfair trading activities to raise market vigilance."
The government is also reorganizing related investigative organizations in line with the law’s enforcement. The Ministry of Justice and the prosecution are promoting the upgrade of the joint investigation team for virtual asset crimes established at the Seoul Southern District Prosecutors' Office to a ‘department’ and formalizing its organizational status. The legal sector is also becoming active. Major domestic law firms such as Bae, Kim & Lee LLC and HwaWoo have established dedicated teams for virtual asset cases and deployed former prosecutors with relevant investigative experience to prepare for related matters.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
