Suggestion: If for the last 3-5 seconds before death there was no incoming traffic from the client, don't apply death penalty.

The 3-5 seconds is to prevent abuse, if pulling the ethernet plug and making the character stand for 5 seconds would save the player, there's no reason they couldn't just have ran away. You can disable it for confined environments such as dungeons where there's no escape from death, or for negative karma players who are already taking a risk on purpose.

You have recently incorporated crystal restoration within game client to incentivize players to take on risky PvE challenges. The problem is, if a player has connectivity problems, instead of taking challenges, there's anxiety to grind even fairly safe spots. I want to believe, that internet and power network in Korea is pristine and never fails, but in Europe not everyone has that privilege. In many cases players lose connection multiple times a day. There's no way 3 or even 6 restorations a year is enough. In current state by monetizing it you really give yourself a bad name, and has to be addressed ASAP.

No need to reinvent the wheel, just one problem to solve > Losing crystals. Nobody cares about death and losing % exp of lvl or buffs. Its just painful to lose expensive crystals.

Your suggestion is impossible and it will create another problem instead of solving the current one

Losing crystals is a part of death penalty. Nobody cares about death and % and therefore nobody should also have a problem with it being fixed as a whole and not just crystal losing aspect.

It is possible. How difficult it is, depends on information I don't possess and you certainly don't either, or if you do, please elaborate.

It will solve majority of the problem's occurences. If you think it would create another one, also elaborate.