South Korea passes cryptocurrency bill to address unfair trading.

The South Korean government is taking measures to protect cryptocurrency investors from incidents like the collapse of Do Kwon’s Terra ecosystem by passing a new crypto bill.

On June 30, the National Assembly passed the Virtual Asset User Protection legislation. The bill aims to regulate unfair trade practices and safeguard crypto investors, as reported by local news agency SBS Biz.

Reportedly, the legislation consolidates 19 crypto-related bills into a unified bill that defines digital assets and imposes penalties for illicit trading activities, such as using undisclosed information, market manipulation, and other unfair trading practices in the crypto space.

Local media states that the main objective of the Virtual Asset User Protection Act is to initially apply the Capital Market Act to virtual assets with securities characteristics. The legislation also intends to establish a framework for imposing penalties and liability for damages caused by unfair crypto trading.

To protect investors, virtual asset service providers (VASPs) in South Korea are now required to assume responsibility for users’ deposits and provide insurance. These measures are necessary to ensure user protection against hacks, computer failures, and other risks.

According to the SBS Biz report, violations of the new rules may result in fixed-term imprisonment of at least one year or significant fines. For instance, the Financial Services Commission can impose a penalty that is twice the amount of profits gained from unfair trade.

Related: Do Kwon denies forging passport, blames ‘Chinese’ agency: Report

This news follows shortly after Do Kwon, the founder of Terraform Labs, was sentenced to four months in prison by a court in Montenegro for using a false passport. He also faces an arrest warrant in South Korea for alleged violations of the country’s capital markets law.

South Korean prosecutors have recently proclaimed that the collapse of Terra’s tokens represents the largest case of financial fraud or financial securities fraud ever to occur in the country.

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