The Financial Supervisory Service (FSS) of South Korea has recently announced its plans to tighten oversight of cryptocurrency trading platforms under its jurisdiction. The aim behind this move is to eliminate fraudulent transactions within the crypto market. In a notice released on July 4, the regulator emphasized the need for local exchanges to establish a “continuous monitoring system for unfair transactions” and report any “abnormal transactions” via a dedicated transmission line.
As part of the new regulatory measures, the FSS has collaborated with virtual asset exchanges to develop the “Abnormal Transaction Monitoring Guidelines.” This initiative is intended to assist exchanges in fulfilling their legal obligations and to support the establishment and operation of a regular abnormal transaction surveillance system. The new system is set to go live on July 19, coinciding with the enforcement of South Korea’s first regulatory framework for crypto investor protection, the Virtual Asset User Protection Act.
Addressing Token Delisting Concerns
In response to fears of a possible mass delisting of tokens, the Digital Asset Exchange Alliance (DAXA) and 20 local exchanges have introduced the “Best Practices for Supporting Digital Asset Transactions” guideline. This framework aims to provide exchanges with a structured approach to reviewing and delisting digital assets. Notably, assets that have been trading for over two years in eligible overseas virtual asset markets with sufficient regulation may be subject to a more lenient review plan.
Recent reports have indicated that South Korean exchanges are planning to conduct a review of over 1,000 altcoins within the next six months to ensure regulatory compliance. This initiative has sparked concerns within the crypto community regarding the potential mass delisting of as many as 600 coins. Despite these fears, the regulatory efforts reflect South Korea’s proactive stance on crypto regulation.
The regulatory changes implemented by South Korea highlight the country’s commitment to establishing high standards for exchange operations and consumer protection in the crypto industry. By enhancing market stability, protecting investors, and deterring financial crimes within the crypto sector, South Korea aims to position itself as a leader in addressing the challenges of the crypto market. Overall, the tightening of oversight on cryptocurrency trading platforms is crucial for promoting transparency, integrity, and trust within the industry.
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