On June 30, 2023, the Political Affairs Committee of the Korean National Assembly passed South Korea’s first legislation targeting virtual assets—the “Virtual Asset User Protection Act” (і상자산い용자보호등에관한법률안)), which aims to protect virtual asset users and restrict Use of Virtual Assets. Unauthorized use of virtual assets. "Fair Trading" will take effect one year after its promulgation (expected to be implemented in July 2024). The text of the "Virtual Asset User Protection Law" has 20 pages and 22 articles. WEEX has downloaded the translation of the complete bill below.
Key points of the bill:
1. The purpose of this law is to protect the rights and interests of virtual asset users and establish and improve the trading order of the virtual asset market (Article 1).
B. The definition of virtual assets is based on the existing definition of virtual assets in the Specified Financial Transaction Information Reporting and Utilization Act, but electronic money and related services issued by the Bank of Korea are excluded from the scope of virtual assets and treated as virtual assets Provide assets. Operator defines virtual asset market (Article 2).
C. Provides that actions affecting South Korea, even if conducted abroad, shall be subject to the provisions of this Act, and virtual assets and virtual asset operators shall be subject to the provisions of this Act, unless otherwise provided for by other laws (Articles 3 and Article 4).
D. The Financial Services Commission may establish and operate committees related to virtual assets to provide policy and institutional recommendations for the virtual asset market and virtual asset operators (Article 5).
E. In order to protect the assets of virtual asset users, the law stipulates matters such as deposit protection, virtual asset custody, insurance, and the establishment and preservation of virtual asset transaction records (Articles 6 to 9).
F. Using undisclosed material information, manipulating market prices, and deceptive trading behaviors are defined as unfair trading behaviors of box trading. If violated, losses must be compensated and fines may be imposed (Note to Articles 10 and 17 of WEEX: This is the focus of the entire bill).
G. It is prohibited to arbitrarily block users’ access to virtual assets, and operators of virtual currency exchanges are required to monitor abnormal transactions in the virtual asset market at any time, take appropriate measures, and notify the financial authorities (Articles 1 and 12), WEEX only Note to customers: Operating institutions cannot arbitrarily restrict users' recharges, withdrawals, and transactions, and must proactively report abnormal situations to regulatory agencies).
H. Clarify the financial authorities’ powers to supervise and inspect virtual asset operators and take investigative measures against unfair trading practices (Articles 13 to 15).
1. Allow the central bank to require virtual asset operators to submit documents when necessary to implement monetary and credit policies, maintain financial stability, and ensure the smooth operation of the payment and settlement system (Article 16).
J. provides for matters relating to penalties and aggravations of persons committing unfair trade practices, allows for the combination of disqualification and fines in the case of imprisonment, and provides for matters relating to confiscation and mitigation of penalties (Art. 2 Articles) 19 to 21).
K. Anyone who violates the obligations under this Act, except for unfair trade practices, shall be subject to a fine not exceeding 100 million won (Article 22).
Virtual Asset User Protection Act
Chapter 1 Overview
Article 1 (Purpose) This law aims to protect the rights and interests of virtual asset users, establish a transparent and good virtual asset market transaction order, and formulate relevant matters to protect the assets of virtual asset users and regulate unfair trading behaviors.
Article 2 (Interpretation) The following terms in this Act have the following meanings.
1. "Virtual assets" refer to electronic representations (including any rights therein) that have economic value and can be traded or transferred electronically. However, it does not include anything falling under any of the following headings:
A. Electronic certificates or information on such certificates cannot be exchanged for money, goods, services, etc. and their use is restricted by the issuer
B. Tangible and intangible results obtained from the use of game materials in accordance with the provisions of Article 32, Paragraph 1, Paragraph 7 of the Game Industry Promotion Act
C. Prepaid electronic payment instruments as stipulated in Paragraph 14 of Article 2 of the Electronic Financial Transaction Act and electronic money as stipulated in Paragraph 15 of this Article
D. According to Article 2, Paragraph 4 of the Electronic Registration of Stocks, Bonds, etc. Act, stocks registered electronically
E. Pursuant to Section 2(2) of the Electronic Bills of Exchange Issuance and Distribution Act, electronic bills of exchange
F. According to Article 862 of the Commercial Code, electronic bill of lading
G. Electronic money forms and related services issued by the Bank of Korea in accordance with the Bank of Korea Act
H. Determined by presidential decree based on the form and nature of the transaction
2. "Virtual asset operator" refers to a person who engages in the following activities related to virtual assets:
A. The act of buying and selling virtual assets (hereinafter referred to as "buying and selling")
B. The act of exchanging virtual assets for other virtual assets
C. Transfer of virtual assets pursuant to presidential decree
D. The act of storing or managing virtual assets
E. Conduct that procures, arranges for, or represents any of the conduct listed in A and B
3. "User" refers to a person who purchases, sells, exchanges, transfers or stores and manages virtual assets through virtual asset business.
4. “Virtual asset market” refers to the market where virtual assets can be bought and sold or where virtual assets can be exchanged.
Article 3 (Application to Foreign Acts) This Act also applies to acts committed abroad that have an impact on Korea.
Article 4 (Relationship with other laws) Unless otherwise provided by other laws, this law shall apply to virtual assets and virtual asset operators.
Article 5 (Establishment of Virtual Assets Committee) ① The Financial Commission may establish and operate a Virtual Assets Committee to provide advice on matters related to the policies and systems of the virtual asset market and virtual asset business stipulated in this Act or other laws and regulations. regulations.
② Matters necessary for the composition and operation of the committee specified in Paragraph 1 shall be determined by presidential decree.
Chapter 2 Protecting User Assets
Article 6 (Deposit Protection) ① Virtual asset operators shall separate user deposits (referring to funds deposited by users for business activities such as buying and selling virtual assets, buying and selling intermediaries, etc.) Deposit or keep it in an authoritative institution such as a bank stipulated in the Banking Act (hereinafter referred to as the "management institution").
WEEX Note (): This article emphasizes that virtual asset operating institutions separate their own assets from customer deposits. This is the most basic "asset segregation principle" recognized by the world.
Judicial case: In June 2023, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the Binance exchange, accusing as many as 13 items: Binance and its U.S. branch transferred more than $12 billion in customer assets to the founder of Binance Zhao (CZ), an entity controlled by Changpeng, included mixing customer and company funds in the account of Merit Peak, a trading company owned by CZ; according to the audit company’s findings, Binance was in control of the operation of the .US platform and the custody of customer assets. There were "significant deficiencies" including commingling client and company funds, reliance on the parent company for financial data and a lack of planning to deal with disasters.
② When a user's deposit is deposited or entrusted to a management agency in accordance with the provisions of the first paragraph, the virtual asset business shall disclose that the deposit is the user's property.
③ No one may write off or seize the deposits deposited or kept in administrative agencies as stipulated in Paragraph 1, and the virtual asset operating institution that deposits or keeps deposits may not transfer or provide guarantee for deposits deposited or kept in administrative agencies. Except for cases specified by presidential decree.
④ If a virtual asset operator has any of the following circumstances, the management agency shall pay the deposit or custody deposit to the user according to the user's request and in accordance with the methods and procedures prescribed by the Presidential Decree:
1. Cancellation of business registration
2. When resolution of dissolution or merger is made
3. When bankruptcy is declared
Article 7 (Storage of Virtual Assets) ① If a virtual asset enterprise accepts user entrustment to store virtual assets, it shall establish and maintain a user registration book containing the following contents:
1. User address and name
2. Type and quantity of virtual assets entrusted by users
3. User virtual asset address (referring to the unique identification number generated electronically and used to manage the transmission and storage history of virtual assets)
② Virtual asset operating institutions shall keep their own virtual assets and user virtual assets separately, and actually hold virtual assets of the same type and quantity as the virtual assets entrusted by users.
③ Virtual asset operators shall securely store virtual assets kept by users in accordance with the provisions of Paragraph 1 separately from the Internet in accordance with the ratio specified by the Presidential Decree.
④ Virtual asset operating institutions may entrust users’ virtual assets to be kept in institutions that comply with the security standards specified by presidential decree.
Article 8 (Purchasing insurance, etc.) Virtual asset business operators shall take necessary measures to fulfill their responsibilities in the event of hacker attacks, computer malfunctions, or other incidents stipulated in the Presidential Decree, such as purchasing insurance in accordance with regulations. Meet the standards set by the Financial Services Commission or deduct or accumulate reserves (for example, WEEX exchange establishes a 1000 BTC investor protection fund).
Article 9 (Establishment, Preservation and Destruction of Transaction Records) ① Virtual asset operating institutions shall keep records that can track and inquire about the content of virtual asset transactions such as buying and selling, or confirm and correct errors in transaction content, within 15 years from the date of the transaction. The date on which the transaction relationship ends ((hereinafter referred to as the “Virtual Asset Transaction Record”)).
② The presidential decree should stipulate the types, storage methods, destruction procedures and methods of virtual asset transaction records that virtual asset companies should keep.
Chapter 3 Supervision of Unfair Trade
Article 10 (Prohibition of unfair trading activities, etc.) ① The following persons shall not use undisclosed major information on virtual assets (referring to the disclosure of previous investments that may have been made to users to unspecified persons in a manner stipulated by the state) Presidential Decree) Information that may have a significant impact may be used for the purchase, sale or other transactions of such virtual assets, nor may it be used by others.
1. Virtual asset enterprises, virtual asset issuers (including legal persons, hereinafter referred to as "legal persons") and their employees and agents become aware of undisclosed material information when performing their duties
2. The process by which a legal person exercises its rights as a major shareholder (a major shareholder as stipulated in Article 2, Paragraph 6 of the Financial Corporate Governance Law, at this time the "financial company" shall be regarded as a "legal person") ") Understand material undisclosed information
3. Understand the important information that has not been disclosed in the process of exercising rights
4. Persons who have permission, authorization, guidance, supervision or other powers over virtual asset companies or virtual asset issuers in accordance with laws and regulations, and who are aware of undisclosed material information in the process of exercising such powers; persons who own or are currently working with virtual asset companies or Cooperation with virtual asset issuers.A person who signs a contract with a virtual asset issuer and becomes aware of undisclosed material information during the signing, negotiation or performance of the contract
5. The Agent (including its employees and agents if the person is a company), the User or any other employee (including its employees and agents if the person falls within paragraphs 2 to 4 and the payor is a company) becomes aware Material information not disclosed in the performance of duties
6. Persons who receive undisclosed important information from persons falling under any of paragraphs 1 to 5 (including those who have not completed one year from the date when they no longer fall under any of paragraphs 1 to 5) people)
7. Other persons designated by presidential decree
WEEX Weike () Note: Paragraphs 1-6 define “insider information.” You can refer to the definition of traditional finance: an insider is a person who has undisclosed information within a company or organization and based on it. Persons or entities with whom such information is traded. This inside information may include the company's important financial data, undisclosed business decisions, merger and acquisition plans, major contracts, product innovations and other important information related to the company. Insiders can be officers, directors, employees, partners, or other persons with a close relationship with the company.
② No one may conduct the following acts to mislead others into buying and selling virtual assets or otherwise cause others to make wrong judgments:
1. Arrange with the parties in advance for others to purchase the virtual asset at the same price at the same time as the sale, and then conduct the transaction.
2. Arrange with the parties in advance for others to purchase and sell the virtual assets at the same price at the same time.
3. Conducting false sales for the purpose of transferring the right to buy and sell virtual assets
WEEX WeChat () Note: The first two articles prohibit insiders from using the inside information they possess to make profits from transactions, which is the behavior of "rat warehouse"; the third article prohibits the behavior of "brushing orders".
Judicial case: The above-mentioned SEC charges against the Binance exchange include allegations that Binance engaged in wash trading on its US platform. This behavior often results in inflated trading volumes and creates a false sense of market interest. Most of these transactions were allegedly conducted through accounts associated with Sigma Chain, which is owned and controlled by Changpeng Zhao. This is the “fake order” behavior prohibited by Article 3 above.
4. Acts of entrustment and agency in Items 1 to 3
③ No one may falsely exaggerate the prosperity of virtual asset trading for the purpose of attracting the trading of virtual assets, or engage in buying and selling activities that fluctuate or fix the market price of virtual assets, or entrust or entrust them.
④ No one may engage in the following activities related to the purchase, sale or other transactions of virtual assets:
1. Use of deceptive means, schemes or techniques
2. Make false statements or statements about important matters, or use documents or other statements or statements to omit necessary important facts so as not to mislead others in order to obtain economic or other property benefits.
3. Use false market prices to induce the purchase and sale of virtual assets or other transactions
4. Entrust or entrust the execution of the acts described in Items 1 to 3
⑤ Virtual asset enterprises shall not sell, purchase or otherwise trade virtual assets issued by themselves or by persons with special relationships specified in the Presidential Decree (hereinafter referred to as "related parties") (WEEX note: "related transactions"). Unless one of the following circumstances applies:
1. Virtual assets issued as a means of payment for specific goods or services. Virtual asset operators promise specific goods and services to users and receive virtual assets in return.
2. When virtual asset providers inevitably acquire virtual assets due to the characteristics of the virtual assets, and follow the procedures and methods prescribed by presidential decree to prevent unfair trading practices or conflicts of interest with users
⑥ Anyone who violates the provisions of paragraphs 1 to 5 shall be responsible for compensation for the losses suffered by the user due to violation of the provisions when buying, selling or conducting other virtual asset transactions.
Article 11 (Prohibition on arbitrary blocking of deposits and withdrawals of virtual assets) ① Virtual asset operators shall not prevent users from accessing virtual assets without legitimate reasons stipulated in the Presidential Decree (WEEX Note: User access rights shall not be arbitrarily restricted) (gold).
② When a virtual asset business operator prevents users from accessing virtual assets, they should inform users of the reasons in advance and report to the Financial Commission immediately.
③ Anyone who violates the provisions of Paragraph 1 shall compensate for the losses suffered by the virtual asset transaction or the client based on the transaction or entrustment price caused by the violation of Paragraph 1.
④ If the claimant fails to exercise the right within two years after becoming aware of the breach in Paragraph 1 or within five years after the breach occurred, the right to claim compensation under Paragraph 3 will be terminated due to the statute of limitations. (WEEX note: The longest statute of limitations is 5 years)
Article 12 (Monitoring of Abnormal Transactions) ① When a virtual asset market operator opens and operates a virtual asset market, it shall monitor abnormal transactions (hereinafter referred to as "abnormal transactions") specified in the Presidential Decree such as transactions with abnormal price fluctuations in virtual assets and other transactions. . And take appropriate measures prescribed by the Financial Services Commission to protect users and maintain good trading order.
② If a virtual asset operator specified in Paragraph 1 suspects any violation of the provisions of Article 10, he shall immediately notify the Financial Commission and the person in charge of the financial supervisory authority (in accordance with the provisions of Article 24, paragraph 1, of the Financial Supervision Act) "Commission Establishment Law" The Ministry of Finance establishes the person in charge of the financial supervision agency (hereinafter referred to as the "Financial Commission"). However, in situations stipulated and notified by the Financial Commission, for example, when the suspected violation of Article 10 is fully established, the parties concerned should not hesitate to report to the investigating agency and report to the Financial Commission and the person in charge of the Financial Commission. Regulator Facts.
Chapter 4 Supervision and Disposal, etc.
Article 13 (Supervision and Inspection of Virtual Asset Business) ① The Financial Commission may supervise whether the virtual asset business correctly complies with this Act or the orders and sanctions prescribed by this Act, and may inspect the business and property status of the virtual asset business.
② In order to protect users and maintain good trading order, the Financial Commission may, when necessary, order the virtual asset business operators or stakeholders specified in the Presidential Decree to take necessary measures against any of the following:
1. Matters related to the submission of documents to verify compliance with this Act or orders or sanctions provided for by this Act
2. Matters related to unique property management
3. Matters related to the custody and management of user property
4. Matters related to maintaining trade order
5. Matters related to business methods
6. Matters related to protecting users during business interruption such as dissolution resolution or bankruptcy declaration
7. Other matters required by presidential decree to protect users and maintain good trade order
③ When the Financial Commission conducts the first inspection, if necessary, it may require virtual asset business operators to report their business or properties, submit data, attend witnesses, provide testimony and express opinions.
④ The person conducting the first inspection should wear a certificate indicating his or her authority and show it to the relevant personnel. The Financial Services Commission may stipulate and notify inspection methods and procedures, action standards for inspection results, and other necessary matters related to inspection business.
Article 14 (Investigation and measures against unfair trading practices) ① When the Financial Commission deems it necessary, the Financial Commission may order a person suspected of violating this Act or an order or sanction stipulated in this Act to submit a report or information for reference. Protect users or sound transactions. When an order is required, the person in charge of the financial regulatory agency may be prompted to inspect the account books, documents or other items.
② In order to conduct the investigation under Paragraph 1, the Financial Commission may require the criminal suspect or other relevant persons to provide one of the following information:
1. Submit a statement of the facts and circumstances surrounding the investigation
2. Stand up and make a statement about the investigation
3. Produce books, documents and other items required for investigation
③ When the Financial Commission, when conducting the first investigation, deems it necessary to investigate a violation of Article 10, it may take one of the following measures:
1. Withhold accounting books, documents and other items submitted under paragraph ②
2. Entering the party’s office or business premises to inspect business, account books, documents and other items
④ When the Financial Services Commission deems it necessary to conduct an investigation specified in Paragraph 1, it may require the virtual asset operator to submit the data required for the investigation in accordance with the method prescribed by Presidential Decree.
⑤ Personnel conducting the investigation in items ③② should carry documents indicating their authority and show them to relevant personnel.
⑥ The Financial Supervisory Commission may disclose the results of investigations and handling of relevant persons and other information and data necessary to prevent misconduct by relevant persons in the manner prescribed by presidential decree.
⑦ The person in charge of the financial supervisory authority shall report the results of the investigation specified in Paragraph 1 to the Financial Services Commission.
Article 15 (Measures against Virtual Asset Companies) ① When the Financial Commission discovers that a virtual asset company or a stakeholder designated by Presidential Decree has violated this Act or an order or sanction prescribed by this Act, it may take the following measures: The following measures: Measures:
1. Order to correct illegal behavior
2. Warning
3. Warning
4. Suspension of all or part of the business
5. Notification or referral to law enforcement agencies
② If the Financial Commission discovers that employees of virtual asset enterprises have violated this Law or the orders and sanctions prescribed by this Law, it may take the following measures against the illegal employees:
1. Recommend firing or suspending officials within six months
2. Request the dismissal or suspension of employees
3. Require employees to be admonished, warned or reprimanded
③ When the Finance Committee intends to make a decision corresponding to a recommendation for dismissal or a request for dismissal in accordance with the provisions of paragraph ②, it shall hold a hearing.
Article 16 (Requesting documents from the Bank of Korea) The Bank of Korea may require virtual asset operators to provide documents if the Financial Services Commission deems it necessary for the implementation of monetary and credit policies, financial stability, and the smooth operation of payments and disbursements. Settlement system related to virtual asset transactions. In this case, the requested data should be limited to the minimum necessary scope and the business burden of the virtual asset operator should be fully considered.
Article 17 (Penalty for unfair trading practices) ① The Financial Commission may impose penalties not exceeding the profits (including unrealized profits) obtained from illegal activities against persons who violate the provisions of Article 10, paragraphs 1 to 4. , hereinafter referred to as this article) or twice the amount of losses avoided due to illegal acts. If there is no profit derived from transactions related to the illegal act or the amount of loss avoided due to the illegal act, or it is difficult to calculate, a fine of not more than 4 billion won (WEEX note: approximately US$3.073 million) may be imposed. imposed.
② When imposing a fine under the provisions of Paragraph 1, the Financial Commission may cancel the penalty imposed under Paragraph 1, or when imposing a penalty under the provisions of Article 19 for the same illegal act, it may exclude all or part of the penalty. Amount (including any amounts forfeited or recovered).
③ When the Financial Services Commission requires the provision of materials related to the investigation in order to implement the punishment specified in Paragraph 1, the Attorney General may provide the materials to the extent deemed necessary.
④ The submission of fines, appeals, extension of fines and installment payment deadlines, and collection of fines shall be governed by Articles 431 to 434 and 434 of the Capital Markets and Financial Investment Business Act The provisions of paragraph 2 to paragraph 4 of Article 434. Penalties and advice on dealing with arrears, refunding overpayments, calculating refund amounts and dealing with defects.
⑤ Except for the provisions of Paragraphs 1 to 4, necessary matters regarding penalty procedures and standards shall be prescribed by Presidential Decree.
Article 18 (Delegation) The Financial Commission may, in accordance with the provisions of the Presidential Decree, delegate some of the responsibilities specified in this Act to the Director of the Financial Supervisory Agency.
Chapter 5 Punishment
Article 19 (Penalty) ① Anyone who falls under any of the following circumstances shall be sentenced to fixed-term imprisonment of not less than one year, or a fine of not less than three times but not more than five times the amount of profit: the loss avoided by the crime. However, if it is impossible or difficult to calculate the amount of benefits obtained or losses avoided as a result of the crime, or if the amount equal to five times the benefits obtained or losses avoided due to the crime is less than 500 million won, the upper limit of the amount shall be 500 million won. South Korean won (WEEX note: approximately $384,000).
1. Violating the provisions of Paragraph 1 of Article 10 by using or prompting others to use undisclosed important information related to virtual assets to purchase, sell or otherwise trade new assets
2. Violate the provisions of paragraph 2 of Article 10, engage in the same behavior, mislead others about the nature of buying and selling virtual assets, or engage in other behaviors that cause others to make wrong judgments
3. Violate the provisions of Paragraph 3 of Article 10 by engaging in the purchase, sale, consignment, or floating or fixing of virtual asset market prices for the purpose of attracting the purchase and sale of virtual assets; and misleading others into thinking that buying and selling virtual assets is a "boom"
4. Persons engaged in activities related to the purchase, sale of virtual assets or other transactions listed in Paragraph 4 of Article 10
Summary of WEEX Wiki (): Anyone who possesses inside information and engages in insider trading, "washing" false transactions, manipulating prices, or using various means to commit fraud shall be sentenced to fixed-term imprisonment of more than one year, or a fine of 5 times the amount of profit. A fine or a fine of not more than 500 million won.
② Anyone who violates the provisions of Paragraph 5 of Article 10 and buys or sells virtual assets issued by himself or his affiliates shall be sentenced to fixed-term imprisonment of not more than ten years or the profits obtained from the crime or the losses avoided. A fine of not less than 3 times but not more than 5 times shall be imposed. However, when the benefits obtained or the losses avoided due to the crime cannot be obtained or are difficult to calculate, or the amount of the benefits obtained or the losses avoided due to the crime is equal to or less than five times less than 500 million won, the upper limit of the fine is 500 million won. .
WEEX Witkey () summary: Anyone who engages in related transactions will be sentenced to a fixed-term imprisonment of not more than ten years, or a fine of not more than 3-5 times the profit, or a fine of not more than 500 million won.
③ If the amount of profits or losses avoided due to the violation of paragraph exceeds KRW 500 million, the imprisonment specified in the paragraph shall be increased in accordance with the provisions of the following paragraph:
1. If the amount of profits or losses avoided exceeds 5 billion won: life imprisonment or imprisonment for more than 5 years (WEEX Note: If the amount of profits from insider trading exceeds 5 billion won, the maximum sentence is life imprisonment)
2. If the amount of profit or loss avoided exceeds 500 million won but is less than 5 billion won: imprisonment for more than 3 years
④ If the amount of profit or loss avoided due to the violation of the provisions of paragraph is 500 million won or more, the prison term of paragraph 1 is increased in accordance with the following paragraph:
1. If the amount of profit or loss avoided is 5 billion won or more: 3 years or more (WEEX Note: The amount of profit from false trading exceeds 5 billion won, the sentence is 3 years or more) or above)
2. If the amount of avoided profit or loss exceeds 500 million won but is less than 5 billion won: imprisonment for not less than 2 years
⑤ In cases of imprisonment specified in paragraph ①①①①①①the, disqualification for a period not exceeding 10 years may be combined with a fine.
⑥Avoid violating the amount of profit (including unrealized profit) or loss of the total income and total transaction costs of the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the total transaction costs (WEEX Note: Based on: the total income of the transaction (Based on: based on the illegal The amount of profits/losses avoided, rather than the amounts involved. That is, the situation is mitigated if losses result from insider trading). In this case, the specific calculation method for each crime category shall be determined by presidential order.
Article 20 (Confiscation and Confiscation) ① Property acquired by a person falling within the paragraph of Article 19 shall be confiscated. If confiscation is not possible, its value shall be forfeited. Property provided or attempted to be provided by a person falling within paragraphs ② to ④ of Article 19 shall be confiscated and, if confiscation is not possible, its value shall be collected.
Article 21 (Penalty) If a representative of a legal person (including organizations, organizations mentioned in this article) or an agent of a legal person or person, a user or other employee violates the provisions of Article 19, the legal person or person shall be punished in addition to the punishment of the perpetrator. , legal entities or individuals shall also be fined pursuant to this article. However, this is not the case if the legal person or person fails to exercise due care and supervision over the legal person's or person's affairs to prevent the commission of a crime.
WEEX NOTE: If employees violate the law, the company will also be punished. However, the company may be exempted if it makes early efforts to monitor and prevent illegal crime.
Article 22 (Penalty) ①A fine not exceeding 100 million won (WEEX note: approximately US$77,000) shall be imposed on any person who falls into any of the following categories:
1. Violate the provisions of Article 6 and illegally manage user deposits
2. Violate the provisions of Article 7 and illegally store user virtual assets
3. Violate the provisions of Article 8 by failing to take necessary measures, such as obtaining insurance or deductibles or accumulating reserves.
4. Violate the provisions of Article 9 and fail to establish, save or destroy virtual asset transaction records
5. Failure to report in accordance with Article 11, Paragraph 2 or false report
6. Failure to take appropriate measures against abnormal transactions, violation of Article 12, Paragraph 12
7. Failure to notify or report under Article 12 or false report
8. Failure to comply with or refuse, obstruct or evade inspection, investigation, order or request under Articles 13 to 15
The fines specified in paragraph ② shall be implemented and collected by the Financial Services Commission in accordance with the methods and procedures prescribed by presidential decree.
appendix
Article 1 (Effectiveness Date) The law will enter into force one year after enactment (WEEX note: expected to be implemented in July 2024).
Article 2 (Amendments to other laws) (omitted)
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