Reasons for Proposal
There have been not a few problems arising from cryptocurrency fever which is mainly about bitcoin. The global cryptocurrency market is now worth over 300 billion dollars. The government, however, has attempted to regulate the market without even establishing a precise concept of cryptocurrency, which repeatedly caused the market to fluctuate wildly and fueled volatility. Worse yet, the lack of legal basis to protect users has complicated the situation.
Cryptocurrency is the product of unprecedented technological advances. Its concept and characteristics are so different from existing currency, securities, foreign exchange, commodities, etc., that it is difficult to regulate it within the framework of existing legislation. To govern crytocurrency by the existing legal framework may hinder technological innovation in cryptocurrency that can serve as a new growth engine in the Fourth Industrial Revolution.
Accordingly, this Act aims to prescribe a definition of cryptocurrency, introduce regulations on registration, etc. of cryptocurrency handling businesses and specify obligations and prohibitions concerning transaction safety and user protection. In addition, the Act only regulates necessary matters in a way that promotes technological innovation, such as blockchain, and protects existing users in order to foster technological advances and fair competition in the cryptocurrency market and soundly manage cryptocurrency handling businesses, thereby enhancing the fairness, reliability and efficiency of the market concerned and thus contributing to the development of the nation's technology and economy.
A. Any person who intends to engage in a cryptocurrency handling business, such as trading business, transaction business, brokerage business, issuance business, management business, etc., shall register under the Financial Services Commission. (Article 5)
B. Cryptocurrency transaction businesses shall deposit the cryptocurrency deposit balance or make a compensation contract. (Articles 8 and 9)
C. Technical, physical and administrative security measures shall be established and implemented in order to secure the safety and reliability of cryptocurrency transactions. (Article 10)
D. Market price manipulation and money laundering related to cryptocurrency trading, etc., shall be prohibited. (Articles 11 and 12)
E. The duty of explanation shall be imposed when providing cryptocurrency trading recommendations, etc.; and trading and brokerage through door-to-door sales, etc. shall be prohibited. (Articles 13 and 14)
Require the registration, etc. of a cryptocurrency trading business (Article 5)
Require a cryptocurrency trader to deposit the cryptocurrency deposit balance or make a compensation contract (Articles 8 and 9)
Prohibit market price manipulation, etc. (Articles 11 and 12)
Impose the duty of explanation when providing cryptocurrency trading recommendations, etc. (Article 13)
Prohibit trading and brokering through door-to-door sales, etc. (Article 14)