The cryptocurrency craze is sweeping the world, including Korea. The problem is that not a few investors are falling vicitm to fraud and hacking in this overheated market without any substantial safety net. To make things worse, the government has announced hasty regulatory policies in the absence of relevant laws, causing more problems to investors.

Accordingly, this Special Act prescribes the definition of virtual currency, registration of relevant businesses, real name verification, security measures for safe transactions, user compensation obligation, self-regulations, etc., thereby guaranteeing freedom of virtual currency businesses while protecting investors and fostering a sound virtual currency industry.

Details

A. Contribute to the development of the national economy by promoting technological innovation in virtual currencies and protecting investors to foster a sound virtual currency industry. (Article 1)

B. Define "virtual currency business" as a business that covers virtual currency transaction business, virtual currency account management business and virtual currency subsidiary business; and define each business (Article 2)

C. Any person who intends to engage in a virtual currency transaction business or a virtual currency account management business shall obtain an approval from the Financial Services Commission. (Article 3)

D. Require the Financial Supervisory Service to supervise the virtual currency transaction business and the virtual currency account management business to comply with this Act and related rules in accordance with the instruction of the Financial Services Commission. (Article 5)

E. Stipulate that the virtual currency transaction business and virtual currency account management business shall generate and preserve all business records for a period specified by Presidential Decree (Article 6)

F. Prescribe matters concerning the obligation of a virtual currency business to verify real names, prohibitions on transactions by minors, unhealthy business practices, unfair trade and money laundering, restrictions on the method of transactions, etc. (Article 7, Articles 11 to 14)

G. Require virtual currency business to comply with the Financial Services Commission's standards for the information technology sector, etc., in order to ensure that virtual currency transactions and virtual currency account management, etc., shall be safely processed. (Article 15)

H. Require virtual currency transaction businesses to either deposit or entrust the virtual currency deposit balance to protect users, and compensate users for losses incurred by accidents (Articles 16 and 17)

I. Establish an association that has virtual currency businesses as members as a self-regulatory organization to maintain business order in the industry and protect users. (Article 6)

Introduce an approval system for virtual currency transaction business, etc. (Article 3)

Impose obligation on virtual money transaction business and virtual money account management business to generate and preserve all business records (Article 6)
Prescribes matters concerning virtual money business’s real name verification obligation and restrictions, such as prohibition on transactions by minors, etc. (Article 7, Articles 11 to 14)
Require virtual money business to comply with the Financial Services Commission's standards for the information technology sector to ensure a safe virtual money transaction, etc. (Article 15)
Impose obligation on virtual money business to compensate (Articles 16 and 17)