South Korea’s Financial Supervisory Service (FSS) has announced plans to ramp up oversight of crypto trading platforms under its purview in order to crack down on fraudulent transactions. The regulatory body declared that local exchanges will be required to establish a “continuous monitoring system for unfair transactions” and report any “abnormal transactions” through a dedicated communication channel.
The FSS has collaborated with virtual asset exchanges to create the “Abnormal Transaction Monitoring Guidelines,” which are aimed at ensuring that exchanges can effectively meet their legal obligations. This new monitoring system is set to be launched on July 19, coinciding with the rollout of South Korea’s inaugural regulatory framework for safeguarding crypto investors, known as the Virtual Asset User Protection Act.
In response to concerns about a potential wave of token delistings, the Digital Asset Exchange Alliance (DAXA) and 20 local exchanges have introduced the “Best Practices for Supporting Digital Asset Transactions” guideline. This guideline outlines a process for exchanges to review and potentially delist digital assets, with a special provision for assets that have a track record of at least two years in regulated overseas markets.
Reports have indicated that South Korean exchanges are preparing to evaluate the listing status of over 1,000 altcoins within the next six months to ensure compliance with regulations. This has sparked anxiety in the crypto community regarding the possibility of substantial delistings. Nevertheless, these regulatory initiatives underscore South Korea’s proactive stance on crypto regulation, as the country strives to establish rigorous standards for exchange operations and investor safeguards.
The recent regulatory developments are expected to bolster market stability, shield investors from potential risks, and discourage illicit activities in the cryptocurrency sector. Industry analysts have lauded these regulatory reforms as a crucial step towards fostering a safer and more transparent trading environment for cryptocurrencies. By prioritizing consumer protection and regulatory compliance, South Korea is positioning itself as a frontrunner in navigating the multifaceted challenges of the crypto industry.
