Crypto regulation in the world: weekly digest # 51

South Korea

South Korea has passed the Virtual Asset User Protection Act, which integrates 19 crypto-related bills, aimed at protecting investors from the risks associated with cryptocurrencies. The legislation focuses on investor protection rules and is the first standalone crypto bill in South Korea. The act is aimed at regulating the digital asset industry and protecting users' assets. The legislation is groundbreaking and introduces regulations to protect users, such as customer asset protection and anti-money laundering measures. The act is expected to have a significant impact on the digital asset industry in South Korea.

Under the Virtual Asset User Protection Act, penalties are set for unfair trade practices, including imprisonment or substantial fines. The maximum penalty for illegal business activities of unregistered entities is up to 5 years of imprisonment or up to KRW50 million of fine (~$40000).

Punitive measures for unfair crypto trade practices that now can be implemented by the Fair Trade Commission in South Korea can impose a penalty surcharge not exceeding 2% of sales for unfair trade practices, but a penalty surcharge not exceeding 500 million KRW may be imposed if no relevant sales have been made or it is impracticable to compute sales.

The TokenScope Team is going to prepare a comprehensive overview of the South Korean crypto regulation in the nearest future.

Argentina

Argentina's National Securities Commission (CNV), the country’s top financial regulator has expressed its intention to adopt the crypto regulations set out by the Financial Action Task Force (FATF).

Argentina is currently in the process of developing a regulatory framework for virtual asset service providers (VASPs), including crypto exchanges. The CNV is expected to establish and regulate requirements to be followed by crypto companies in the country. The jurisdiction of the CNV over VASPs is specified in a reform of the money laundering prevention law that is being discussed in the Argentine Congress.

The requirements that crypto companies will have to follow include the protection of users, the security and efficiency in the development of operations, the security of public savings, and the prevention of money laundering, among others.

The country’s government is seeking to strengthen regulation before a FATF mutual evaluation process, which is expected to assess Argentina's measures to combat money laundering and terrorist financing in 2024. By adopting the FATF's crypto regulations, Argentina hopes to improve its anti-money laundering and counter-terrorism financing efforts in the crypto space.

The FTX exchange update

FTX, the failed cryptocurrency company, is reportedly in talks with investors to relaunch its international cryptocurrency exchange, FTX.com. The company has been holding discussions with interested parties about backing a potential restart of the exchange through structures such as a joint venture. FTX debtors have declined to comment on the report.

During the FTX bankruptcy procedure, the company has recovered at least $5 billion of liquid assets, including cash, crypto, and securities. The recovered assets include $1.7 billion in cash, $3.5 billion in crypto assets, and $0.3 billion in securities. FTX's current management team has made «substantial progress» in securing assets as the $5 billion figure doesn’t include any illiquid cryptocurrency assets.

FTX filed for Chapter 11 bankruptcy protection in the US in November 2022 following its spectacular collapse that sent shivers through the digital assets industry. In the days leading up to the failure, customers of Sam Bankman-Fried’s crypto exchange withdrew billions of dollars, hobbling the firm’s liquidity. A rescue deal with rival exchange Binance also fell through, precipitating crypto’s.

The relaunch of FTX.com could have a positive impact on the price of FTT, the native token of FTX, which has already soared over 70% in a week on FTX relaunch rumors.

News from other countries:

• The US SEC has called the Bitcoin ETF applications of BlackRock and Fidelity inadequate. Now both firms are going to reapply their applications. The SEC has already approved a Bitcoin futures ETF, but there is still no positive decision on spot Bitcoin ETF.

• The Financial Services and Markets Bill of the UK has received the final approval and has been granted Royal Assent on June 29, 2023. The bill aims to regulate financial services and markets and give regulators more power over the UK financial system.

• The Slovakian Parliament has passed a bill to lower taxes on cryptocurrency income. The new law will cut personal income tax on profits from the sale of cryptocurrencies that have been held for at least a year to 7%, down from the current sliding scale of either 19% or 25%. Additionally, crypto payments up to 2400 euros will not be taxed, and crypto income will be excluded from a 14% health insurance tax.

We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!