Assemblyman Kim Byung-wook Proposes 'Virtual Asset Act' Aiming to Incorporate Virtual Assets into the Regulatory Framework

Kim Byung-wook, Chairman of the Subcommittee on Bill Review of the National Assembly's Political Affairs Committee, is presiding over the 1st Bill Review Subcommittee meeting of the Political Affairs Committee held at the National Assembly on the 23rd. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Koo Chae-eun] The Democratic Party of Korea has introduced a law to develop the virtual asset (cryptocurrency) market. The core of the bill is to establish a policy foundation for blockchain and virtual asset-related industries and to incorporate virtual assets into the regulatory framework to punish unfair trading.

On the 18th, Democratic Party lawmaker Kim Byung-wook proposed the "Act on the Development of the Virtual Asset Industry and Protection of Users" (Virtual Asset Industry Act).

Globally, interest in virtual assets is soaring, and in South Korea, the daily average trading volume of virtual assets has surpassed that of the stock market, with the number of users rapidly increasing. However, there is no separate legislation regulating the virtual asset industry or users. Since virtual assets are not within the regulatory framework, there are overheating phenomena such as the "Kimchi Premium," and legal measures to protect users from damages caused by virtual assets are insufficient.

The main provisions of the proposed Virtual Asset Industry Act include △ incorporating the virtual asset industry into the regulatory framework △ imposing an obligation on issuers to verify information upon listing △ establishing codes of conduct for the virtual asset industry △ building a continuous monitoring system to prevent unfair trading practices △ mandatory membership of virtual asset operators in the Virtual Asset Industry Association.

Additionally, unfair trading practices such as using undisclosed material information, wash trading, fictitious trading, and price manipulation are strictly prohibited. Exchanges must conduct "continuous monitoring" of unfair trading practices and regularly report to the association. The association must immediately report suspected illegal activities to the Financial Services Commission for prompt action. This "market-led continuous monitoring" aims to prevent user damages. Financial authorities will also supervise the industry accordingly.

In cases of violations found through supervision or audits by financial authorities, strong sanctions such as business suspension or registration cancellation will be imposed to ensure accountability in market self-regulation.

Lawmaker Kim said, "As the development of blockchain technology and virtual asset trading is an unstoppable global phenomenon and trend, it is now time for the National Assembly and government to swiftly establish legal and institutional support so that market participants can trade safely and transparently and related industries can develop soundly."

This content was produced with the assistance of AI translation services.