The Virtual Asset Investor Protection Act, the first component of the country’s crypto legislation, was approved by the National Policy Committee of the South Korean parliament on April 25.
The bill was adopted by the Legislative Review Subcommittee of the South Korean National Assembly, according to local media reports.
This initial stage is essential for establishing regulations to safeguard South Korean cryptocurrency consumers and their assets from unscrupulous business activities.
According to the sources, the second stage of legislation would start once it is clear that there are international standards for virtual assets. Enhancing market order regulations, such as issuing and declaring virtual assets, will be the main focus.
Only a few weeks prior to the bill’s passage, South Korea’s parliament decided to take extra measures to regulate the nation’s cryptocurrency sector.
The proposed legislation was apparently the subject of a contentious debate in the National Assembly, with the majority of the discussion focusing on investor protection and the formation and disclosure of virtual assets.
Taking shape: South Korea’s regulatory environment
Approximately 15 million South Koreans are believed to use cryptocurrencies, and the country’s virtual asset market is expected to reach a value of 55 trillion won ($42 billion) by the second half of 2021. These factors have prompted lawmakers and regulatory bodies to enact laws requiring investor protection and disclosure.
A huge step in that direction has been made with the passage of the Virtual Asset Investor Protection bill, and events like the loss of the UST stablecoin, created by Korean national Do Kwon, have only served to highlight how important it is.
Eleven virtual asset laws, four amendments to the Electronic Financial Transactions Act, two changes to particular financial information laws, and one amendment to the Financial Services Commission make up the National Assembly’s crypto legislative arsenal.
Recently, lawmakers released regulations for security token offerings, which represents a big advance for businesses. The Financial Services Commission declared that it will monitor cryptocurrency whales as officials drafted a law to promote the metaverse industry.
In South Korea, regulatory focus has been on promoting some market sectors and imposing restrictions on others. For instance, the government has invested $1.6 million into a metaverse fund, indicating that web3 and the metaverse are major priorities.