- South Korean regulators are considering a new class action legal system to hold crypto criminals liable for damages.
- The proposed legal system would target those involved in the unfair trading of virtual assets.
- The country’s Financial Services Commission is leading the charge for this new lawsuit system.
Financial regulators in South Korea are planning to introduce a new class action legal system in light of the rising malpractices in the crypto industry. The primary objective is to address the unfair trading of virtual assets by coming up with measures other than existing criminal punishments.
According to a report by Kukmin Ilbo, South Korea’s Financial Services Commission (FSC) is leading the charge to punish unfair trade practices in the crypto space liable for damages using the proposed lawsuit system. In an FSC internal report, the financial regulator indicated to the National Assembly’s Political Affairs Committee that it was inclined to accept the introduction of the said class action lawsuit system.
“A bill to enact a class action law that can be applied to general illegal activities, including the securities sector, has been proposed to the National Assembly. We can accept various alternatives, including adding the field of virtual assets to this bill,” the Financial Services Commission stated in its report.
The report comes almost three weeks after South Korea’s Political Affairs Committee’s first legislative review was carried out on March 28, 2023. The financial regulator also stated that virtual assets could not be viewed as finance and added that it wouldn’t be appropriate to put virtual assets under the purview of the Virtual Asset Act of the country’s Financial Supervisory Service.
The virtual asset law is slated for discussion at the National Assembly’s Legislative Review Subcommittee on April 25, 2023. Seung Jae-hyun, a senior researcher at the Korea Criminal Justice Policy Institute, believes that the new lawsuit system will encourage entities in the crypto space to exercise internal control in the interest of investor protection.
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