Korea Promotes Class Action System For Virtual Asset Trading To Protect Investors

Key Points:

• South Korea is pushing to build a class-action system for unfair virtual asset trading and responsible investors’ compensation.
• The plan is designed to protect investors by creating alternatives to criminal penalties for unfair trading.
• The plan was developed following a murder case involving a crypto investment failure in central Seoul last month.

According to a report by the Korea Financial Services Commission to the National Assembly’s Political Affairs Committee, the Korean Financial Services Commission is proceeding with the filing of a class-action lawsuit unfair virtual asset trading system and pursuing a liability program, media outlet Kingmin Ilbo reported.

The plan protects investors by creating alternatives to criminal penalties for unfair trading. A class action system is a system in which some victims file lawsuits on behalf of the victims, and other victims who suffer similar damages can also be relieved without the need for separate cases.

“A bill to enact a collective action law that applies to illegal activities in general, including the securities sector, has been proposed to the National Assembly. We can accept various alternatives, including adding virtual assets to this bill.” The Financial Services Commission said.

The Financial Services Commission also reiterated its position that virtual assets are not financial assets and are highly speculative. The agency expressed that the Financial Supervisory Service’s inspection rights for virtual asset operators should not be included in the Virtual Assets Act.

“If the inspection authority of the Financial Supervisory Service is provided for in the Virtual Assets Act, it will mislead the public that virtual asset markets and virtual asset operators are treated like the institution of financial markets.”

The virtual property law is expected to be discussed at the Legal Review Subcommittee of the National Assembly Political Committee on the 25th.

According to the analysis, the action above of the Korean financial agency is due to a murder case related to the failure of a virtual currency investment operation in the center of Seoul last month, along with the continuous occurrence of currency market manipulations.

It is reported that in the “Gangnam Murder Case,” the suspect made a loss after investing in PURE tokens in 2022. The suspect kidnapped and killed a manager of the Puriever project due to resentment hate, but Project Puriever denies involvement with that victim.

According to investigative agencies like the Korean Prosecutor’s Office, former Coinone employees have been accused of listing dozens of tokens, including Puriever token (PURE), in exchange for money. Prosecutors are expanding the scope of their investigation and believe that there may be more cryptocurrencies listed illegally.

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