South Korea Launches New Cryptocurrency Monitoring System and Regulations

On July 4th, the Financial Supervisory Service (FSS) of South Korea unveiled a new “continuous monitoring system” designed to diligently oversee and detect suspicious cryptocurrency transactions taking place on exchanges.

This system is a collaborative effort between the FSS and South Korean digital asset exchanges and is designed to provide ongoing surveillance of abnormal transactions.

It is set to be implemented on July 19, aligning with the enforcement of the Virtual Asset User Protection Act, which was passed in 2023. This act is aimed at regulating unfair trade practices and safeguarding the interests of investors.

According to the Financial Supervisory Service (FSS), the system implemented by major cryptocurrency exchanges that are subject to regulation allows the regulator to effectively filter out abnormal transactions, covering nearly all of the country’s trading volume, around 99.9%.

With this system in place, any abnormal transactions will be flagged by the exchange’s system and promptly reported to the FSS through a dedicated data transmission line.

These abnormal transactions could involve activities such as market manipulation or engaging in other illegal trading practices.

This mechanism is a significant step towards ensuring the integrity and security of cryptocurrency trading within the country.

As of June 16, 29 cryptocurrency exchanges, which include major platforms such as Upbit, Bithumb, Coinone, Korbit, and Gopax, were officially registered with the Financial Supervisory Service (FSS) and were placed under monitoring in accordance with the Virtual Asset User Protection Act.

As part of this legislation, the exchanges are required to adhere to stricter review guidelines for token listings, aimed at promoting increased transparency and security within the cryptocurrency market.

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