According to a report presented to the South Korean Parliament on Nov. 23, the Financial Services Commission (FSC) asks the National Assembly to criminalize unfair activity in crypto marketplaces such as price manipulation and insider trading.
The FSC study will be used to create crypto legislation for consideration by the South Korean Parliament. The National Assembly directed the FSC to prepare a thorough draft laws on cryptocurrency in one month, although the law is unlikely to be ready by the year’s last legislative sitting on December 9, according to CoinDesk Korea.
According to the FSC guidelines, penalties should be proportionate to the earnings earned unlawfully, with a minimum of one year in prison and fines ranging from three to five times the illegal gains. For profits of more over KRW 5 billion ($4.2 million), the minimum sentence is five years in jail.
The FSC also asked for taxation on some forms of non-fungible tokens, presumably contradicting prior assertions that NFTs would be excluded.
South Korean plans to impose a 20% tax on cryptocurrency earnings above KRW 2.5 million ($2,100) beginning in 2022, but the government and opposition parties are seeking for a delay, according to the Korea Times.
However, the FSC also wants virtual asset service providers to create an association so that they may self-regulate and resolve any conflicts.