Thu Sep 26 13:27:15 UTC 2024: ## South Korea Cracks Down on Crypto Scams with Life Sentences and Strict Regulations

**Seoul, South Korea** – South Korea’s financial regulator has issued a stark warning to crypto scammers: illicit gains exceeding $4 million could result in a life sentence. This tough stance comes after the country’s newly enacted Virtual Asset Users Protection Act, designed to combat crypto crime.

The Act, implemented in July 2024, is partly inspired by the high-profile collapse of Terraform Labs, the company founded by South Korean entrepreneur Do Kwon, which wiped out billions in shareholder value. The legislation aims to prevent similar disasters and includes a range of measures, including hefty fines up to five times the value of illegal profits, as well as jail sentences of up to a year.

Lee Bok-hyun, head of the Financial Supervisory Service (FSS), emphasized the government’s zero-tolerance approach, stating that they will dedicate all investigative resources to uncover illegal transactions. The Act also mandates that Virtual Asset Service Providers (VASPs) maintain 80% of customer funds in cold storage and establish reserve funds for cybersecurity breaches.

These stringent regulations haven’t deterred all criminals, as evidenced by a recent case of a crypto scammer who underwent plastic surgery and employed wigs to avoid detection. This highlights the lengths some are willing to go to evade the authorities.

The Act’s implementation marks a significant shift in South Korea’s approach to crypto regulation, demonstrating a firm commitment to protecting investors and ensuring the stability of the digital asset landscape. The move is likely to serve as a deterrent to future criminal activity and contribute to a safer environment for crypto users in the country.

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