South Korean MP Wants to Launch a Fund to Help Struggling Crypto Investors
A South Korean politician wants the government to create a special fund to help crypto investors who have suffered losses in the markets – and says that crypto exchanges should foot the bill.
News1 reported that Kim Byung-wook, an MP for the opposition Democratic Party, told a group of blockchain industry leaders and financial regulators at a summit that leading trading platforms should launch an “investor protection fund.”
He was quoted as saying:
“If exchanges created [such] a fund, the market would develop more soundly and investors would enjoy greater protection – even before new legal measures are introduced.”
The government has repeatedly spoken about the need to boost crypto investor protection after thousands of citizens sustained heavy financial losses at the start of the bear market in May. The “LUNAC/Terra incident,” as South Korean lawmakers and media professionals have dubbed it, is likely to become a catalyst for major regulatory reform.
The government has stated that it will create a special bill to regulate the market – and will place investor protection at the heart of this new law.
However, Kim warned that Seoul should not become too focused on protecting investors. He stated that overly restrictive efforts would stifle the crypto industry’s ability to grow.
Kim added:
“If we only focus on the negative aspects of the cryptocurrency market, domestic wealth could flow abroad. Simply suppressing the domestic market will not stop people from investing [in crypto].”
He added that politicians and regulators now “need to approach [crypto] futures and margin trading from a new perspective.”
And Kim added that the previous government’s legislative attempts to stop non-Koreans from using domestic exchanges were misguided.
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