The Financial Supervisory Service (FSS) in South Korea is taking steps to tighten oversight of cryptocurrency trading platforms in order to eliminate fraudulent transactions. This move comes as part of the country’s efforts to regulate the crypto industry and protect investors.
New Monitoring System
One of the key measures announced by the FSS is the requirement for local exchanges to establish a continuous monitoring system for unfair transactions. This system will help the regulator detect and prevent fraudulent activities in the crypto market. Exchanges will also be required to report abnormal transactions through a dedicated transmission line.
The new monitoring system is set to go live on July 19, coinciding with the implementation of South Korea’s first regulatory framework for crypto investor protection, the Virtual Asset User Protection Act. This timeline indicates that the authorities are keen on swiftly implementing measures to enhance oversight of the crypto industry.
Best Practices Guideline
In addition to the new monitoring system, the Digital Asset Exchange Alliance (DAXA) and 20 local exchanges have issued a guideline titled “Best Practices for Supporting Digital Asset Transactions.” This guideline aims to provide a framework for exchanges to review and potentially delist digital assets that do not meet regulatory standards.
There were initial concerns within the crypto community about potential mass delistings of as many as 600 coins by South Korean exchanges. It was reported that over 1,000 altcoins would be reviewed for regulatory compliance in the next six months. However, the authorities have assured that a more lenient review plan will be in place for assets that have traded in eligible overseas markets with sufficient regulation.
Proactive Regulatory Approach
South Korea’s proactive approach to crypto regulation reflects its commitment to setting high standards for exchange operations and protecting consumers. By implementing these regulatory changes, the country aims to enhance market stability, protect investors, and prevent financial crimes in the crypto sector.
The tightening of oversight of crypto trading platforms in South Korea is a positive step towards creating a more secure and transparent environment for cryptocurrency trading. The introduction of a new monitoring system and the issuance of best practices guidelines demonstrate the country’s commitment to regulating the crypto industry effectively.
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