The South Korean financial regulator has established a virtual asset fraud reporting center to combat investment fraud related to virtual assets. The center will operate a reporting period by the end of this year and will be led by the Financial Fraud Response Team in collaboration with relevant departments.

The recent kidnapping and murder of a South Korean woman in a cryptocurrency-related dispute has prompted lawmakers to introduce a comprehensive Bill that consolidates 19 different crypto-related policies into a single piece of legislation. The proposed law aims to establish stricter regulations and oversight in the cryptocurrency industry, bringing it under closer scrutiny to prevent future criminal activities and protect investors. The move towards tighter regulations reflects growing concerns over the lack of regulations in the crypto industry, which has been plagued by incidents of fraud, scams, and criminal activities. If passed, the proposed legislation will serve as a foundation for safeguarding the interests of investors, curbing illicit activities, and promoting responsible growth in the cryptocurrency sector.

The prosecutor leading South Korea's investigation into the collapsed Terra-Luna crypto project has called for the extradition of its founder, Kwon Do-hyeong, to Seoul to face trial. Kwon is currently detained in Montenegro for allegedly travelling on a forged passport, and both South Korea and the US have requested his extradition to face charges related to the collapse of his $40 billion crypto empire. Terra's USD stablecoin and sister cryptocurrency Luna collapsed in May 2022, and both South Korean and US prosecutors say the crypto project was designed to defraud investors and violated financial laws in both countries. If convicted, Kwon may face over 40 years in prison, which would be the longest sentence ever in the country for a financial crime. (forkast)

Prosecutors accused the individuals of earning illicit profits of nearly 460 billion Korean won ($350 million), the Korean daily KBS World reported. Kwon would face similar charges if extradited to his home country, Sung-han told the Journal, with a jail term of up to 40 years.  

The South Korean prosecutor leading the investigation into crypto entrepreneur Do Kwon said he believes extraditing him to his native country would be the best way to bring justice to victims of the TerraUSD cryptocurrency crash, which wiped out some $40 billion from digital currency markets.

The United States White House has released a national standards strategy for key and emerging technologies, which includes distributed ledger technology (DLT) and digital identity infrastructure.

Governments worldwide are implementing regulatory frameworks for crypto regulation, with some cracking down on the sector while others welcome crypto with appropriate rules and guidelines. The South Korean government is partnering with law firm Yulchon to tighten oversight of the country's crypto sector, which has heavy exposure to the digital asset class, and the cryptocurrency bill is expected to become law this year. Meanwhile, Hong Kong's vision of becoming a crypto hub is threatened by the increasing number of crypto-related scams, and lawyers are working with regulators to balance investor protection and innovation.

South Korean legislators passed a first phase review of proposed regulations that would give the nation’s Financial Services Commission authority to investigate and supervise financial activity related to “digital assets,” including cryptocurrency.

Terraform Labs co-founder Daniel Shin and nine others have been indicted by South Korean prosecutors on charges including violations of capital markets law related to the failed Terra/Luna project. The prosecutors claimed that Terra was a "fictitious" project, and that the indicted individuals gained at least $346.2 million in profits by selling their coins before the crash, causing "astronomical damage" to investors. Shin's lawyers have said that their client left Terraform Labs in 2020 and was, therefore, not involved in the massive 2022 Terra/Luna crash. The prosecutors have frozen $184.6 million in assets from the ten indicted individuals, some of which are held in Switzerland-based digital asset bank Sygnum Bank AG.
(By Sead Fadilpašić)

South Korea's National Assembly has passed the first phase of a bill that outlines regulations for digital assets, with an emphasis on consumer protection and exclusion of central bank digital currencies. The bill requires crypto service providers to keep user assets and deposits separate, have insurance, hold reserves, and maintain transaction records. It also criminalizes price manipulation, false promotion of crypto assets, and other illegal activities. The Financial Services Commission will have the authority to examine and supervise digital asset businesses, and service providers must report any irregular activities. The bill will undergo further review and must pass the Legislation and Judiciary Committee before becoming law.