South Korea advances new telecom and financial anti-fraud regulations: crypto assets to be included in compensation for victims

Jinse Finance reported that on July 16, the Korean Financial Services Commission released a revised draft of the “Special Law on the Prevention of Telecommunication Financial Fraud and Return of Damage Funds Implementation Ordinance,” planning to include telephone scam funds transferred to crypto assets within the scope of victim compensation, and clarifying the standards for the return and valuation of crypto assets. The relevant provisions are expected to officially take effect on October 1.According to the new regulations, if the frozen assets are cryptocurrencies, victims will, in principle, be compensated with the same type and quantity of assets; if the scammed assets differ from the frozen assets in form, compensation will be made in the actual form of the assets frozen at the time of account freeze. In situations involving both cash and crypto assets, regulatory authorities will value crypto assets based on market prices at the time of freezing, in order to determine the final compensation amount.The Korean Financial Services Commission stated that clarifying the asset form and valuation timing for returns will facilitate quicker and fairer compensation in complex cases where multiple victims' funds are commingled. The public consultation period for the revised draft will continue until August 24.