South Korean parliament passes first phase of virtual asset bill

On April 25, the South Korean parliament’s National Policy Committee passed the first step of the country’s crypto bill, the Virtual Asset Investor Protection Act.

According to local media reports, the bill was approved by the Legislative Review Subcommittee of the National Assembly of South Korea.

This first step is crucial for introducing rules to protect South Korean crypto users and their assets and guard against unfair trade practices in the country’s crypto sector.

Per the reports, once the global standards for virtual assets become more apparent, the second phase of legislation will kick in. It will focus on enhancing market order regulations, such as issuing and disclosing virtual assets.

The bill’s passing comes only weeks after South Korea’s parliament resolved to take additional steps to control the country’s crypto market.

The National Assembly reportedly heatedly debated the proposed legislation, with the conversation largely centering on investor protection and the creation and disclosure of virtual assets.

South Korea’s regulatory landscape taking shape

The growing number of crypto users in South Korea, estimated at approximately 15 million people, and the increasing value of the country’s virtual asset market, which had hit 55 trillion won ($42 billion) by the second half of 2021, have pushed lawmakers and regulatory authorities to write investor protection and disclosure measures into law.

The passing of the Virtual Asset Investor Protection bill is a significant step in that direction, and occurrences like the demise of the UST stablecoin, founded by Korean national Do Kwon, have only emphasized the need for it.

The National Assembly’s crypto legislative arsenal contains 11 virtual asset enactments, four amendments to the Electronic Financial Transactions Act, two revisions to specific financial information legislation, and one amendment to the Financial Services Commission.

Lawmakers recently issued standards for security token offerings, a significant step forward for enterprises. Meanwhile, the Financial Services Commission announced that it would keep an eye on crypto whales as officials worked on drafting a Metaverse Industry Promotion Law.

The regulatory spotlight in South Korea has been on supporting certain market areas and establishing limitations on others. For instance, web3 and the metaverse are important targets, as indicated by the fact that the government has put $1.6 million into a metaverse fund.