South Korea's Financial Commission Revises Fraud Fund Return Regulations to Include Crypto Assets
According to Etoday, South Korea's Financial Commission has announced a draft revision of the "Special Law Implementation Regulations for Preventing Telecommunications Financial Fraud and Returning Victim Funds," planning to include phone scam funds transferred to crypto assets within the scope of victim compensation. The regulations will clarify the standards for the return and valuation of crypto assets, and are expected to take effect on October 1.
Under the new regulations, if the frozen assets are cryptocurrencies, victims will generally receive compensation based on the type and quantity of assets. If the defrauded assets differ from the form of frozen assets, compensation will be made in the form of the assets that existed at the time the account was frozen. In cases where cash and crypto assets are mixed, regulatory authorities will value the crypto assets based on the market price at the time of freezing to determine the final compensation amount.
The Financial Commission stated that clarifying the form of returned assets and the valuation timing will help achieve faster and fairer compensation in complex cases involving mixed funds from multiple victims. The public consultation period for the draft revision will last until August 24.
Source: Public Information
ABAB AI Insight
The South Korean Financial Commission's revision directly addresses the trend of telecom fraud funds flowing into crypto assets, as traditional return mechanisms have struggled to cover crypto scenarios. The new regulations fill regulatory gaps by clarifying the return of types and quantities of assets and the valuation at the time of freezing.
In terms of capital pathways, including crypto assets in victim compensation expands the scope, and the market price valuation mechanism at the time of freezing provides operational standards for mixed fund cases. Regulatory resources are directed towards rapid and fair compensation, while crypto market participants face higher compliance and tracking requirements.
Similar to global regulatory responses to fraud and money laundering migrating to crypto, South Korea is currently in a phase of strengthening consumer protection and coordinating crypto regulation.
Essentially, this represents a regulatory change: the traditional financial fraud compensation framework is being extended to include crypto assets, with pricing and return mechanisms evolving from cash-centric to multi-asset forms, and the enforcement authority and victims' rights are more clearly defined in mixed on-chain and off-chain scenarios.
ABAB News · Cognitive Law
- Where fraud money goes, regulation follows.
- Valuation at the time of freezing solves the fairness issue of mixed assets.
- Clear rules for quick compensation are better than vague mechanisms that delay justice.