South Korean Lawmakers Propose Stricter Regulations on Speculative Cryptocurrency Chat Rooms

April 16, reports indicate that South Korean lawmakers have proposed an amendment to the Virtual Asset User Protection Act aimed at tightening regulations on speculative cryptocurrency investment chat rooms on social media and enhancing oversight of crypto exchanges. This bill, introduced by Min Byoung-dug, Kang Hoon-sik, and other members of the Democratic Party of Korea (DPK), requires these chat rooms to register with the Financial Services Commission (FSC) as quasi-investment advisory firms. Under current law, such entities are prohibited from compensating for investment losses, guaranteeing returns, or promoting false profit rates. The proposed amendment also mandates that crypto exchanges report any formulation or modification of their terms and conditions to the Financial Services Commission. Additionally, according to a report by Digital Asset, lawmaker Min Byoung-dug has also introduced a bill aimed at protecting customer assets in the event of a cryptocurrency exchange bankruptcy. This amendment aims to ensure that customers' rights to recover their assets are not considered as general unsecured claims, which would otherwise be distributed in the bankruptcy estate.