A bill has been proposed to restrict cryptocurrency-related criminal convictions from entering the market.


Lee Jeong-moon, a member of the Democratic Party of Korea (Cheonan B, South Chungcheong Province, Political Affairs Committee), announced on the 13th that he had proposed a partial amendment to the Act on Reporting and Use of Specific Financial Transaction Information (Special Financial Transaction Information Act).

The main purpose of this amendment proposed by Representative Lee is to block in advance the market entry of virtual asset operators who have committed crimes under the Criminal Act and Special Act, such as falsification of prior records, fraud, embezzlement, and breach of trust, by additionally stipulating the Criminal Act and the Act on the Aggravated Punishment, etc. of Specific Economic Crimes in addition to the existing financial laws that are the requirements for rejecting reports from existing virtual asset operators.

The current law, which went into effect last month, stipulates that the head of the Financial Intelligence Unit may not accept reports of virtual asset operators from those who have been sentenced to a fine or heavier punishment under financial laws prescribed by Presidential Decree, such as the Act on the Regulation and Punishment of Concealment of Criminal Proceeds and the Act on Financial Investment Business and Capital Markets, and for whom five years have not passed since the date of completion of execution or exemption from execution.

However, considering that most virtual currency crimes have been prosecuted and punished based on criminal law rather than financial laws, the current law introduced to prevent money laundering using virtual currency is not actually related to virtual currency.There have been concerns that the process of reporting and accepting criminal records related to criminal and special crimes may not be able to identify those with a high frequency of crimes.

Therefore, if the amendment proposed by this member of the National Assembly stipulates in the law that even in cases of violations of the Criminal Act or the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, reports from businesses will not be accepted, just as in cases of violations of financial laws, it is expected that this will reduce the possibility of legal disputes related to the interpretation of the requirements for non-acceptance of reports and further strengthen the protection of financial consumers by preventing those with criminal records related to virtual currency from entering the market in advance.

The lawmaker emphasized, “As the digital financial market utilizing new technologies expands, the value and market size of virtual assets such as Bitcoin are growing rapidly worldwide, but the system supporting this is not keeping pace.” He added, “We will do our best to protect domestic investors by addressing regulatory gaps to prevent those with cryptocurrency-related criminal records from entering the market.”