South Korea Launches Monitoring System for Crypto Transactions Ahead of New Investor Protection Act
The Financial Supervisory Service (FSS) of South Korea announced a “continuous monitoring system” on July 4 for suspicious cryptocurrency transactions on exchanges. The new system, established in collaboration with South Korean digital asset exchanges, will go live on July 19, coinciding with the implementation of the Virtual Asset User Protection Act.
Crypto exchanges subject to a new South Korean law will have to implement a system allowing authorities to receive reports on suspicious transactions to comply with the new system.
South Korea to Combat Market Manipulation and Illegal Trading
The FSS stated that the system would enable constant monitoring of abnormal transactions to filter out and report suspicious activities, including market manipulation and other illegal trading practices. The monitoring will cover approximately 99.9% of the country’s trading volume, ensuring comprehensive market oversight.
South Korea's FSS launches a crypto monitoring system to track suspicious transactions.
This system, covering 99.9% of the country's crypto trading volume, goes live on July 19, aligning with the Virtual Asset Protection Act.
29 exchanges will be subject to this new law.
— Moonward Capital (@moonwardcapital) July 4, 2024
Additionally, the agency advised exchanges to establish dedicated teams to monitor dubious transactions and provided guidelines for identifying illegal activities through auditing information such as on-chain data. These illegal activities include using undisclosed information for unfair trading, price manipulation, and forging circulation data.
Under the new framework, once suspicious transactions are identified, they will be reported to the FSS through a dedicated data transmission line. The initiative is part of broader efforts to regulate unfair trade practices and protect investors, as mandated by the Virtual Asset User Protection Act passed in 2023.
From January to May, the FSS developed a standardized reporting format for transaction data submissions from local exchanges. Based on this format, the FSS built a system capable of distinguishing irregular transactions.
“We benchmarked KRX’s (Korea Exchange) criteria in extracting abnormal transactions and prepared models and metric indicators through several simulations, which we expect will filter out abnormal transactions meticulously,” the FSS stated.
South Korea’s Crypto Exchanges to Face Stricter Monitoring and Compliance Under New Regulations
As of June 16, 29 cryptocurrency exchanges, including major players such as Upbit, Bithumb, Coinone, Korbit, and Gopax, were registered with the FSS and will be subject to this continuous monitoring. These exchanges must also adhere to stricter review guidelines for token listings, enhancing the market’s integrity.
The new law also mandates that crypto service providers safeguard over 80% of deposits in cold storage to protect user funds and enroll in insurance programs for potential user compensation in case of security breaches. South Korean lawmakers are currently developing follow-up legislation to the User Protection Act, addressing topics such as stablecoin regulation and allowing institutional crypto trading.
Earlier this week, South Korean exchanges and their representative body announced the establishment of a new code of conduct for local firms. This includes re-evaluating 1,333 cryptocurrencies being traded domestically to ensure compliance with the new regulatory standards.
The post South Korea Launches Monitoring System for Crypto Transactions Ahead of New Investor Protection Act appeared first on Cryptonews.
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South Korea Launches Monitoring System for Crypto Transactions Ahead of New Investor Protection Act
The Financial Supervisory Service (FSS) of South Korea announced a “continuous monitoring system” on July 4 for suspicious cryptocurrency transactions on exchanges. The new system, established in collaboration with South Korean digital asset exchanges, will go live on July 19, coinciding with the implementation of the Virtual Asset User Protection Act.
Crypto exchanges subject to a new South Korean law will have to implement a system allowing authorities to receive reports on suspicious transactions to comply with the new system.
South Korea to Combat Market Manipulation and Illegal Trading
The FSS stated that the system would enable constant monitoring of abnormal transactions to filter out and report suspicious activities, including market manipulation and other illegal trading practices. The monitoring will cover approximately 99.9% of the country’s trading volume, ensuring comprehensive market oversight.
South Korea's FSS launches a crypto monitoring system to track suspicious transactions.
This system, covering 99.9% of the country's crypto trading volume, goes live on July 19, aligning with the Virtual Asset Protection Act.
29 exchanges will be subject to this new law.
— Moonward Capital (@moonwardcapital) July 4, 2024
Additionally, the agency advised exchanges to establish dedicated teams to monitor dubious transactions and provided guidelines for identifying illegal activities through auditing information such as on-chain data. These illegal activities include using undisclosed information for unfair trading, price manipulation, and forging circulation data.
Under the new framework, once suspicious transactions are identified, they will be reported to the FSS through a dedicated data transmission line. The initiative is part of broader efforts to regulate unfair trade practices and protect investors, as mandated by the Virtual Asset User Protection Act passed in 2023.
From January to May, the FSS developed a standardized reporting format for transaction data submissions from local exchanges. Based on this format, the FSS built a system capable of distinguishing irregular transactions.
“We benchmarked KRX’s (Korea Exchange) criteria in extracting abnormal transactions and prepared models and metric indicators through several simulations, which we expect will filter out abnormal transactions meticulously,” the FSS stated.
South Korea’s Crypto Exchanges to Face Stricter Monitoring and Compliance Under New Regulations
As of June 16, 29 cryptocurrency exchanges, including major players such as Upbit, Bithumb, Coinone, Korbit, and Gopax, were registered with the FSS and will be subject to this continuous monitoring. These exchanges must also adhere to stricter review guidelines for token listings, enhancing the market’s integrity.
The new law also mandates that crypto service providers safeguard over 80% of deposits in cold storage to protect user funds and enroll in insurance programs for potential user compensation in case of security breaches. South Korean lawmakers are currently developing follow-up legislation to the User Protection Act, addressing topics such as stablecoin regulation and allowing institutional crypto trading.
Earlier this week, South Korean exchanges and their representative body announced the establishment of a new code of conduct for local firms. This includes re-evaluating 1,333 cryptocurrencies being traded domestically to ensure compliance with the new regulatory standards.
The post South Korea Launches Monitoring System for Crypto Transactions Ahead of New Investor Protection Act appeared first on Cryptonews.
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