Virtual Asset Consumer Protection Act Approved by National Assembly
By Hwang Ji-hyun, Reporter
The National Assembly’s plenary meeting on the 30th witnessed the successful passage of the ‘Act for the Protection of Consumers of Virtual Assets’. The bill, designed to regulate unfair trade in virtual assets and safeguard consumers, gained significant support with 265 votes in favor and only 3 abstentions out of 268 present members. This marks the first virtual asset-related legislation to be enacted since the introduction of the Specific Financial Transactions Information Act.
One of the crucial factors contributing to the bill’s approval was the decision to initially apply the Capital Markets Act to virtual assets that take on a securities-like nature. This move has established a solid framework for identifying the misuse of undisclosed information, market manipulation, and illicit trading as unfair trading practices within the virtual asset realm. Violators may face imprisonment for a specified period of no less than one year or fines ranging from three to five times the amount of profit or loss avoided.
To safeguard user assets, virtual asset operators are now mandated to establish and maintain customer deposits, trust accounts, insurance provisions, mutual assistance subscriptions, and virtual asset transaction records. These measures are put in place to prepare for potential contingencies such as hacking incidents and computer failures.
Furthermore, the legislation clearly defines the authority of financial regulatory bodies to investigate and take action against unfair transactions conducted by virtual asset operators. Additionally, the Financial Services Commission has established virtual asset-related committees aimed at providing policy and institutional advice regarding the virtual asset market and its operators.
The virtual asset consumer protection act is planned to come into effect in June 2024, one year after its plenary approval. Previously, the bill received approval from the Political Affairs Committee, responsible for virtual assets, on the 11th of last month, and subsequently from the Legislation and Judiciary Committee of the National Assembly on the 29th.
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[딜사이트 황지현 기자] The ‘Act for the Protection of Consumers of Virtual Assets’, which regulates unfair trade in virtual assets and protects consumers, crossed the threshold of the plenary meeting of the National Assembly on the 30th.
The enactment of the Act for the Protection of Users of Virtual Assets proposed at the plenary meeting on this day was passed with 265 votes in favor and 3 abstentions among 268 present. The bill became the first virtual asset-related bill enacted after the Specific Financial Transactions Information Act.
The key to the bill being passed is that it has decided to apply the Capital Markets Act first to virtual assets in the nature of securities. A new basis was established to define the use of important undisclosed information, market manipulation, and illegal trading as unfair trading practices in virtual assets. Breach of this can lead to a fixed period of imprisonment of not less than one year or a fine of not less than three times to not more than five times the amount of profit or loss avoided.
In addition, in order to protect user assets, virtual asset operators are also required to create and store customer deposits, trust, insurance and mutual assistance subscription in preparation for accidents such as hacking and computer failure, and virtual asset transaction records.
Furthermore, the bill specifies the authority of the financial authorities to investigate and act on unfair transactions of virtual asset operators. The Financial Services Commission has also allowed virtual asset-related committees to operate for the purpose of policy and institutional advice on the virtual asset market and operators.
The plan to enact is expected to come into force in June 2024, one year after passing the plenary. Previously, the Virtual Assets Consumer Protection Act passed the plenary meeting of the Political Affairs Committee, the standing committee responsible for virtual assets, on the 11th of last month, and then passed the Legislation and Judiciary Committee of the National Assembly on the 29th .
ⓒ Looking at the market with new eyes. Unauthorized reproduction and distribution of dealing sites is prohibited
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