Following an emergency investigation into the Terra market crash, South Korea’s National Assembly and authorities are apparently proposing tighter crypto regulations.
According to local media, the South Korea virtual asset laws will go beyond the Capital Market Act, imposing more severe penalties. Unfair profits from cryptocurrency pumps and dumps, price manipulation, unlawful trading, insider trading, and wash trading, according to the report, will result in civil fines as well as criminal incarceration.
The new Virtual Property Industry Act offers a license structure for international corporations, as well as strong disclosure standards. Domestic guidelines would apparently apply to corporations like Terraform Labs that have domestic subsidiaries.
The Financial Services Commission report also claims that crypto firms will face higher entrance obstacles than the present reporting standards.
White papers and transparency assessments will be managed by a distinct institution, the Digital Asset Management Institute, according to the report. “A coin-qualified issuer system will also be developed, imposing duties to write, notify, and disclose a coin white paper,” he continues.
The new authorisation and registration system also tries to distinguish between virtual asset risk and commercial activity type.
The report further notes: “This means that exchanges that trade and broker cryptocurrencies or operators that deal with high-risk products need to issue more strict authorization.”
In the wake of the TerraLUNA and UST market crashes, the South Korean government is apparently considering regulating the issuance and circulation of stablecoins.
Meanwhile, another rumor stated that the “Yeouido Grim Reaper” special unit had been revived to probe Terra. On May 18, a joint financial and securities criminal investigation team was formed to look into TFL’s techniques for attracting investors.
Terra is also suspected of being a Ponzi scheme, according to the team.
Terraform Labs CEO Do Kwon, a South Korean citizen, is facing a class-action lawsuit from LUNA and Terra USD (UST) investors for alleged fraud. They are also apparently preparing to seize his property on a temporary basis.
Meanwhile, the National Tax Service is apparently pursuing tax payments from CEO Kwon, other key executives, and Terraform Labs totaling 100 billion won ($78.5 million).
According to the news agency Naver, soon before the Lunar market meltdown, CEO Kwon was attempting to liquidate his domestic holdings and relocate abroad in order to avoid paying taxes.
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