South Korean authorities are aiming to implement a class action legal system to deal with crypto-related malpractices. The fresh system is being put together to take action against those involved in the unfair trading of virtual assets and to hold them liable for damages that go beyond existing criminal punishments.

According to a report by Kukmin Ilbo, South Korea’s Financial Services Commission (FSC) is spearheading the move to punish misconduct in the crypto space through the proposed class action system. An internal report from the FSC informed the National Assembly’s Political Affairs Committee that it was open to introducing the said lawsuit system.

“A bill to enact a class action law that can be applied to general illegal activities, including the securities sector, has been proposed to the National Assembly. We can accept various alternatives, including adding the field of virtual assets to this bill,” the Financial Services Commission stated in its report.

The report follows the Political Affairs Committee’s first legislative review on March 28, 2023. Additionally, the financial regulator stated that virtual assets should not be viewed as finance and that it wouldn’t be suitable to include virtual assets under the Virtual Asset Act of the country’s Financial Supervisory Service.

The virtual asset law is set to be discussed at the National Assembly’s Legislative Review Subcommittee on April 25, 2023. Seung Jae-hyun, a senior researcher at the Korea Criminal Justice Policy Institute, believes that the new lawsuit system will prompt companies in the crypto space to exercise internal control to safeguard investor interests.

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