A bill seeking to regulate crypto assets has passed the first review phase in South Korea’s National Assembly, Herald Kyungjae reported. The bill does not include central bank digital currencies (CBDCs) and other services the country’s central bank offers to avoid policy confusion.

The Crypto Regulation Bill Passes First Phase

According to local media reports, South Korea’s crypto regulation bill passed the first phase of review in the National Assembly Tuesday. Since only the first stage of the bill’s review has been completed, the legislation has not yet passed into law.

Interestingly, the bill, which primarily aims to regulate digital assets and protect consumers from potential risks, excludes CBDCs and other services offered by the Bank of Korea, the country’s central banking authority. The bill defines digital assets as an “electronic representation of an economic value that can be traded or transferred electronically.”

According to Herald Kyungjae, the idea to exclude CBDCs from the forthcoming digital assets law belongs to the Democratic Party lawmaker and committee member Kim Han-gyu. Kim said the move seeks to “prevent policy confusion.”

How Does the Bill Aim to Protect Users?

The new bill also asks crypto service providers to separate their assets from user funds and deposits, to provide insurance, and maintain reserves to prevent a fallout in case of a system failure or a significant hack. In addition, crypto trading service providers will also be required to keep records of all transactions.

Further, the bill states that failure to provide the necessary information in investor disclosures and activities, such as falsely promoting certain cryptocurrencies and manipulating their price, is against the country’s law. Those who engage in such activities could face a punishment of one year in prison or pay a penalty three to five times the amount of illegally made profits.

“[The bill] will play an important role in establishing market order as it develops the basic law to block unfair trade acts.”

– said Hwang Suk-jin, a member of the Ruling People Power Party’s Digital Asset Special Committee.

The 2022 crypto winter and a series of high-profile collapses have forced global regulators to double down on regulating the burgeoning sector. Last week, the European Union approved a comprehensive regulation that seeks to establish harmonized rules for digital assets in the bloc.

This article originally appeared on The Tokenist

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.