South Korea to change crypto legal framework

South Korean authorities are proposing to widen the current Digital Assets Bill due to the security issues in the wake of the FTX collapse.

The politician Yoon Chang-hyun is currently working with authorities on amendments to prevent the re-occurrence of FTX-like cases. With a new revision, local regulators such as the Financial Services Commission and Financial Supervisory Service will expand their influence on local exchanges, depriving them of the opportunity to self-regulate.

In the original Digital Assets Bill, digital asset operators were obliged to continuously monitor and take appropriate actions in the event of abnormal price fluctuations or trading volume of virtual assets.

A new modification of the Digital Assets Bill provides for mandatory segregation of customer deposits. It also gives financial authorities more control over abusive trading practices. The regulators will be able to supervise and review crypto projects and exchanges to protect investors from millions of dollars in losses like those suffered by Terra LUNA.

Related: Arrest Warrant for Do Kwon Issued in South Korea

An official from the National Assembly said to the local media outlet News1:

“The bill was submitted to reflect on the FTX incident and prevent a recurrence, and the financial authorities’ influence should be strong.”

While this may have been an echo in the global crypto community, for South Korea, it is still an issue. The crash of Terra LUNA forced local authorities to work with Interpol and issue a notice upon arrival to Do Kwon, who happened to be on the run. South Korean prosecutors also froze $39.6M of his assets and banned top executives, including Terra’s co-founder Daniel Shin, from leaving the country.

Related: Seoul freezes an account of Terra co-founder