Enhancing Crypto Regulation in South Korea
The Financial Supervisory Service (FSS) of South Korea is set to implement a robust monitoring system on July 19 to track suspicious cryptocurrency transactions on exchanges. This move is in line with the Virtual Asset User Protection Act and aims to combat market manipulation and illegal trading activities in the crypto space.
Constant Monitoring for Market Oversight
The FSS has collaborated with digital asset exchanges in South Korea to establish a continuous monitoring system that will keep a close eye on abnormal transactions. This monitoring system is designed to filter out and report any suspicious activities, including market manipulation and other illicit trading practices. Here’s what you need to know:
- The system will provide constant surveillance over approximately 99.9% of the country’s trading volume.
- Exchanges subject to the new law will have to implement a reporting system to comply with the monitoring requirements.
Guidelines for Exchanges
In addition to implementing the monitoring system, the FSS has advised exchanges to take proactive measures to monitor dubious transactions. Here are some key points:
- Exchanges are urged to set up dedicated teams to monitor suspicious activities and identify illegal practices.
- The agency has provided guidelines for detecting illegal activities, such as price manipulation and unfair trading practices.
Compliance and Reporting
Under the new framework, once suspicious transactions are identified, exchanges will be required to report them to the FSS through a dedicated data transmission line. This initiative is part of broader efforts to regulate crypto trading practices and protect investors as mandated by the Virtual Asset User Protection Act.
Stringent Monitoring and Compliance Measures for Crypto Exchanges
South Korea has registered 29 cryptocurrency exchanges, including industry giants like Upbit, Bithumb, and Coinone, to comply with the new monitoring system. These exchanges will face tighter regulations and scrutiny to ensure market integrity and user protection. Here’s what you need to know:
User Protection and Security Measures
The new regulations mandate that crypto service providers store over 80% of user deposits in cold storage to enhance security. Additionally, exchanges are required to enroll in insurance programs to compensate users in case of security breaches. South Korean lawmakers are also working on follow-up legislation to address stablecoin regulation and institutional crypto trading.
Industry Collaboration and Compliance Checks
South Korean exchanges, along with their representative body, have announced initiatives to re-evaluate cryptocurrencies traded domestically. This process aims to ensure compliance with the new regulatory standards and strengthen consumer protection measures.
Hot Take: Promoting Transparency and Security in the Crypto Market
The regulatory efforts by the Financial Supervisory Service in South Korea underscore a commitment to promoting transparency and security in the crypto market. By implementing a continuous monitoring system and tightening compliance measures, authorities aim to deter illicit activities and safeguard investor interests in the evolving digital asset landscape.
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