South Korea’s Financial Services Commission has released a draft amendment to the enforcement decree of the Special Act on the Prevention of Telecommunications Financial Fraud and Refund of Damage, according to Etoday. The proposal would bring phone scam proceeds that were transferred into crypto assets into the scope of victim compensation and set out standards for how those assets should be returned and valued.
Under the draft, if the frozen asset is cryptocurrency, victims would in principle receive restitution in the same asset type and quantity. If the form of the defrauded asset differs from the frozen asset, compensation would be made based on the form of assets actually held in the account at the time it was frozen. For cases involving a mix of cash and crypto assets, regulators would value the crypto portion using market prices at the time of the freeze to determine the final compensation amount.
The FSC said clarifying both the form of returned assets and the valuation point would help speed up compensation and make it fairer in complex cases where funds from multiple victims are mixed together. Public comments on the draft will remain open until Aug. 24, and the new rules are expected to take effect on Oct. 1.
South Korea’s Financial Services Commission has published a draft amendment to the enforcement decree of the Special Act on the Prevention of Telecommunications Financial Fraud and Refund of Damage, according to Etoday. The proposal would include phone scam funds that were moved into crypto assets within the scope of victim compensation, while also setting standards for crypto asset returns and valuation. The rules are expected to take effect on Oct. 1.
Under the draft, if the frozen asset is cryptocurrency, victims would in principle be compensated based on the type and quantity of the asset. If the form of the defrauded asset differs from the form of the frozen asset, compensation would be made according to the actual asset form held when the account was frozen.
In cases where cash and crypto assets are mixed, regulators would value the crypto assets using market prices at the time of the freeze to determine the final compensation amount.
The Financial Services Commission said that clarifying the form of returned assets and the timing of valuation would support faster and fairer compensation in complex cases involving commingled funds from multiple victims. Public comments on the draft amendment will run through Aug. 24.
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