According to CryptoPotato, the South Korean government is implementing stricter penalties for crypto criminals to protect investors from unfair market activities. Under the new measures, individuals involved in illegal activities may face jail terms of over a year or fines equal to three to five times the stolen amount. In more severe cases, those who make illegal profits of more than five billion won ($3.8 million) may be sentenced to life imprisonment or be imposed a fine equivalent to twice the stolen amount.
The new measures are part of the Virtual Asset User Protection Act, which is expected to be effective on July 19, 2024. The law tasks crypto business operators with the responsibility of protecting users' deposits, which are to be managed by institutions with public trust, like banks. Crypto businesses must keep at least 80% of users' deposits in cold storage to lessen the impact of hacks and computer failures. They are also required to sign up for insurance or accumulate a reserve fund with a stipulated compensation limit.
The Financial Services Commission (FSC) and Financial Supervisory Service (FSS) are tasked with supervising and inspecting digital asset businesses to investigate and take action on violations. The South Korean government plans to build an infrastructure for executing supervision and investigative duties to ensure a smooth implementation of this process. The system will also help crypto business operators prepare and carry out their obligations.