Following the recent shockwaves of the (LUNA) crash which had shaken the spirit of many crypto enthusiasts, South Korea’s ruling party, People Power Party (PPP), is reportedly considering new crypto laws to ensure users’ protection and prevent the same incident again. 

Some new laws about crypto come with blockchain platforms that are still being considered. However, not much information has been released about these proposed laws.

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While speaking at a party meeting on digital assets on Monday, the chief policy maker, Rep. Sung Il-jong, added, “We are thinking of making a law on blockchain-based platforms.”

Indeed, the South Korean government has been a strict nation and previously imposed tightening policies for the crypto industry; officials showed intentions for different legislation to protect users better over excessive market volatility. 

Addressing the part of the special financial transaction law to monitor terror financing and prevent money laundering, Sung added, “Some parts are mentioned in the special financial transaction law, but overall it’s not organized.”

Lee Bok-Hyun, head of the Financial Supervisory Service (FSS), which works in collaboration with the ruling party under the Financial Service Commission (FSC) to monitor financial institutions, called for a voluntary regulatory body and commented;

In order for the virtual asset market to have responsible growth, establishing a reasonable regulation system is important. But considering its complexity and unpredictable environment, setting a voluntary regulatory system through the active participation of private experts needs to be emphasized.

Officials are actually attempting to set up standards for listing and delisting a coin and featuring a trading warning system. Moreover, they would include a policy to conduct a periodical risk assessment and provide these fetched insights to the crypto community.

South Korean Authorities Investigating Crypto Firms

May’s crash of TerraUSD triggered the probe in many crypto platforms in South Korea. Likewise, it made regulators take action as the crypto market is still taking effect and recorded significant lows discouraging investors.

On May 28, a local television channel JBTC reported that the government authority FSS, which works under the FSC, has started investigating the payment gateway services operating in the country. Similarly, the Commission found only six payment channels supporting digital transfers out of 157 platforms. 

The fledgling coin Bitcoin, which decides the price of other linked currencies, had decreased 47% since May 5, contrary to its previous mark of $40,000 when the stablecoin TerraUSD and its sister token Luna collapsed.

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With the crypto market experiencing a long-lasted bearish trend, virtual assets’ prices have been at their lows since December 2021. At the time of writing, the Bitcoin price decreased over 25% in the last seven days, dropping nearly 8% in a day. BTC’s price currently fluctuates over $22,000.

As per the stats provided by Financial Service Commission (FSC), the crypto market of the state is valued at 55.2 trillion won ($42.9 billion). Similarly, their estimated daily trading volume stands around 11.3 trillion won.