South Korean lawmakers propose tighter regulations on speculative cryptocurrency chatrooms

On April 16th, it was reported that South Korean lawmakers have proposed amendments to the "Virtual Asset User Protection Act" aimed at strengthening regulation of speculative cryptocurrency investment chat rooms on social media and enhancing supervision of cryptocurrency exchanges. The bill was introduced by lawmakers from the Democratic Party of Korea (DPK), including Min Byoung-dug and Kang Hoon-sik, requiring these chat rooms to register with the Financial Services Commission (FSC) as quasi-investment advisory companies. Under current law, such entities are not allowed to compensate for investment losses, guarantee returns, or advertise false profit rates. The proposed amendments also require cryptocurrency exchanges to report any establishment or modification of their terms and conditions to the Financial Services Commission.

In addition, according to Digital Asset, lawmaker Min Byoung-dug also proposed a bill aimed at protecting customer assets in the event of a cryptocurrency exchange's bankruptcy. This amendment aims to ensure that the rights of customers to recover their assets are not considered general unsecured claims, as otherwise these claims would be distributed in the bankruptcy estate.