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South Korea To Amend Its Legal Framework To Better Scrutinize Crypto Projects.

Still on the heels of the Terra LUNA fiasco and the ongoing collapse of FTX,  South Korean Authorities are proposing new amendments to the Digital Assets Bill, seeking greater scrutiny over cryptocurrency exchanges.

The Congressman, Yoon Chang-Hyun, is preparing an amendment to enhance financial authorities’ control capabilities over crypto exchanges, to prevent the repetition of crypto exchange meltdowns.

According to News 1, Chang-Hyun is proposing to grant more control to the country’s Financial Services Commission and Financial Supervisory Service “in lieu of self-regulation” of cryptocurrency exchanges.

“Rep. Yoon Chang-Hyun of the People Power Party plans to propose a revision of the secure digital asset transactions bill at the first legislative review subcommittee of the National Assembly’s Political Affairs Committee held on the same day.”

Protect investors from repeated crashes

The new Proposed amendment to the Digital Assets Act calls for the mandatory separation of customer deposits.

It also gives greater authority to financial authorities against unfair trading practices.

As such, regulators and authorities will be able to supervise and inspect cryptocurrency projects and exchanges to protect investors major losses.

South korean prosecutors have taken good steps previously to crack down crypto frauds.

Recall that the South Korean prosecutors issued an arrest warrant in conjunction with Interpol to arrest Do Kwon, Terra’s founder.

Exchanges Can no Longer Use Their Clients’ Funds

Amongst other significances of the new amendment, crypto exchanges will not be able to arbitrarily seize their users’ deposits once they have been sent to a custodian institution, what happened with FTX and Alameda Research.

Also, the new law eliminates the “self-regulatory” power of cryptocurrency exchanges to take “appropriate measures” in case of irregular fluctuations in the price or trading volume, transferring the power of such activities into the hands of financial authorities.

As such, exchanges must swiftly report any unusual activity to the Governor of the Financial Supervisory Service, who is now responsible for taking appropriate measures to curb fraud, money laundering, or any other crime.

By Meekness Nnoka

Blockchain Analyst & Writer with top-notch Technological background. Enjoys reading and writing fascinating crypto contents. 4 years content creating experience.

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