South Korea’s main financial watchdog, the Financial Services Commission (FSC), demanded the country’s Parliament bring criminal liability to insider trading, price manipulation, and other unfair behavior in crypto markets according to a report submitted to Parliament on Nov. 23, CoinDesk reported.
Parliament ordered the watchdog to draft comprehensive bill
The watchdog’s report will serve to draft crypto legislation to be passed in Parliament. Parliament ordered the FSC to draft a comprehensive bill on cryptocurrency in one month. However, it probably won’t be ready for the last parliamentary session of the year on Dec. 9.
FSC asks for at least a year in prison
The FSC recommends that the penalty correspond to the amount of unfair gains, with at least one year in prison and a fine of 3-5 times the illegal gains. At the moment, the minimum sentence for gains over the equivalent of $4.2 million in local currency is five years in prison.
South Korea levies 20% tax on especially large crypto gains
The watchdog asked for taxes on some types of NFTs, reversing earlier claims that suggested all NFTs would be exempt. Seoul will levy a 20% tax on crypto gains over $2.1 million, effective 2022. The Korea Times reported that both the majority and opposition parties called for an extension to the deadline.
The FSC has also requested digital asset service providers form an association so they can self-regulate and rule on any disputes. The 20% tax was supposed to take effect on October 1, but was postponed due to a lack of taxation infrastructure. The ruling Democratic Party of South Korea proposed to delay the taxation policy until 2023, but the proposal was rejected, CoinDesk Korea reported.
At a parliamentary audit yesterday, South Korean Finance Minister and Deputy Prime Minister Hong Nam-ki said:
Any further delay in the already postponed enforcement will lead to the loss of public trust in government policy and undermine stability in the legal system.
For now, NFTs seem to be exempt from the crypto taxes because they are not classified as digital assets.
Exchanges fail to register with local authorities
All crypto exchanges in South Korea were obligated to register with local authorities by Sept. 24 or stop operating. Hours before the deadline, just 10 exchanges had applied. At the time, just four exchanges – Bithumb, Coinone, Korbit and Upbit – had concluded deals to have banks verify their accounts.
