South Korea’s Financial Supervisory Service (FSS) is taking steps to tighten oversight of crypto trading platforms under its jurisdiction in order to eliminate fraudulent transactions. In a recent notice, the regulator announced that local exchanges will be required to establish a “continuous monitoring system for unfair transactions” and report any “abnormal transactions” through a dedicated transmission line. This move is part of an effort to ensure that virtual asset exchanges are able to fulfill their legal obligations smoothly.
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, known as the Virtual Asset User Protection Act. Additionally, the Digital Asset Exchange Alliance (DAXA) and 20 local exchanges have introduced the “Best Practices for Supporting Digital Asset Transactions” guideline to address concerns about potential token mass delistings. This guideline provides a framework for exchanges to review and potentially delist digital assets, with a more lenient review plan for assets that have been traded for over two years in eligible overseas virtual asset markets with sufficient regulation.
Reports have surfaced indicating that South Korean exchanges will review the listing of over 1,000 altcoins in the next six months to ensure compliance with regulations. This has sparked concerns within the crypto community about possible mass delistings of up to 600 coins. Despite these concerns, the regulatory moves being made by South Korea reflect a proactive approach to crypto regulation. The country is striving to establish high standards for exchange operations and consumer protection, positioning itself as a leader in addressing the challenges of the crypto industry.
Industry observers have noted that the regulatory changes being implemented will not only enhance market stability but also protect investors and deter financial crimes within the crypto sector. By tightening oversight and introducing new guidelines, South Korea is taking significant steps to ensure the integrity of its crypto trading platforms and the protection of investors who engage in trading virtual assets.
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