Yoon Chang-Hyun, a South Korean politician from the People Power Party, wants to change the crypto-safe transaction bill because he thinks the current bill doesn’t protect users enough after the FTX collapse.
Yoon Change-Hyun presented the bill change to the National Assembly Political Affairs Committee on November 22 during a first subcommittee meeting to discuss legislation filed by lawmakers.
At a time when the cryptocurrency sector was already reeling from the devastation of the long-running crypto winter, FTX’s failure added fuel to the flames. It devastated investor confidence, with Bitcoin currently selling at around $16,000 per coin.
The crypto industry has been badly impacted twice this year, with the Terra Luna catastrophe in May and now the FTX scandal. Along with dampening investors’ enthusiasm for cryptocurrency investments, the failure of crypto ventures prompted worldwide authorities to launch investigations and establish stricter laws in light of the insolvency of crypto platforms.
Yoon Chang-Hyun’s proposal focuses on user protection and seeks to enable authorities to properly inspect crypto exchanges in order to prevent future FTX-like events. It entails requiring crypto exchanges to keep users’ cash distinct from other monies in accordance with Articles 5 and 6.
Surprisingly, the FSC accepted the recommendation and incorporated it into the new “Digital Asset Act,” as the deposit of users’ cash into a management firm cannot allow operators to arbitrarily take withdrawals, as has occurred in the past.
South Korea’s new crypto regulations will increase FSC authority
The FSC now has control over the platform as a self-regulated system thanks to an amendment to this bill. Instead of implementing actions of their choosing in the face of extraordinary volatility in crypto prices, operators will be required to follow the authorities’ notified and suggested way.
Because bitcoin is still relatively new, many governments have been revising their crypto rules. Following the FTX debacle, around 16 pieces of legislation on digital assets are already circulating in the South Korean National Assembly.
Initially, the Financial Service Commission (FSC) was meant to plan new crypto laws based on earlier bills presented by Hye-ryeon Baek, a National Assembly Member of the political affairs committee, and Chang-Hyeon Yoon, Chairman of the Digital Asset Special Committee.
Hye-Ryeon Baek’s bill seeks to increase openness in the regulation of virtual asset transactions. Chang-hyun Yoon’s bill, on the other hand, wants “fairness in the digital asset market” in order to give investors a secure trading platform.
Another bill proposed by an MP calls for new laws to prevent cryptocurrency exchanges from suspending withdrawals or deposits without providing a legitimate reason.
The law proposes to give government officials veto authority over trading platform operations such as freezing withdrawals. In other words, before collecting consumers’ assets, crypto exchanges would need to obtain permission from authorities, and non-compliant corporations might face fines of up to $74,000 per bill.