South Korea’s Financial Supervisory Service (FSS) has initiated a “continuous monitoring system” to oversee suspicious cryptocurrency transactions across exchanges. In a statement on July 4, the FSS disclosed its collaboration with South Korean digital asset platforms to establish a mechanism for ongoing scrutiny of abnormal transactions. This system is set to commence operations on July 19, coinciding with the enforcement of the Virtual Asset User Protection Act, which was passed in 2023 to regulate unfair trading practices and safeguard investors.
According to the FSS, major cryptocurrency exchanges governed by the legislation have implemented a monitoring framework that enables the regulator to identify and filter out abnormal transactions, covering approximately 99.9% of the nation’s trading volume. Upon detection, exchanges will promptly notify the FSS of suspicious transactions through a dedicated data transmission line. Such transactions encompass activities aimed at market manipulation or other forms of illicit trading.
Source: Financial Supervisory Service
Related developments include South Korea’s stance on potential mass token delistings, deemed improbable under the new regulatory framework. As of June 16, 29 exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, have registered with the FSS and are subject to monitoring under the Virtual Asset User Protection Act. The legislation also mandates these platforms to adopt stricter guidelines for reviewing token listings.
Following the approval of spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds by the United States Securities and Exchange Commission, South Korean authorities are evaluating the implications of listing such investment vehicles on local exchanges. Researchers caution that further study is necessary prior to approval, given the potential influx of capital into the cryptocurrency market.
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