South Korea’s Financial Supervisory Service (FSS) plans to tighten supervision of crypto trading platforms under its jurisdiction to eliminate fraudulent transactions.
In a July 4 notice, the regulator announced that local exchanges must establish a “continuous monitoring system for unfair transactions” and report “abnormal transactions” through a dedicated transmission line.
According to the notice:
“To ensure that virtual asset exchanges can smoothly meet their legal obligations, the Financial Supervisory Authority has jointly established the ‘Abnormal Transaction Monitoring Guidelines’ with the exchanges and supported the establishment and operation of a regular monitoring system for abnormal transactions.”
The new system will 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.
Mass removal of tokens is unlikely
In a parallel development, the Digital Asset Exchange Alliance (DAXA) and twenty local exchanges have addressed fears of a possible mass delisting of tokens with the ‘Best Practices for Supporting Digital Asset Transactions’ guideline.
In their July 2 statement, DAXA stated that the directive provides a framework for exchanges to assess and delist digital assets. The directive would allow for a more relaxed assessment plan for assets that have been traded for more than two years on “eligible overseas virtual asset markets with sufficient regulation.”
Previous reports suggested that South Korean exchanges would review the listing of more than 1,000 altcoins in the next six months to ensure regulatory compliance. This raised concerns within the crypto community about possible mass removal of as many as 600 coins.
Meanwhile, these regulatory steps further reflect South Korea’s proactive approach to crypto regulation. The Asian country aims to set high standards for exchange transactions and consumer protection, positioning it as a leader in dealing with the challenges of the crypto industry.
Market observers noted that the regulatory changes will increase market stability, protect investors and deter financial crimes in the crypto sector.