South Korea’s Financial Supervisory Service (FSS) has unveiled plans to increase supervision of cryptocurrency trading platforms within its jurisdiction. The aim is to crack down on fraudulent transactions and ensure the integrity of the crypto market. The regulator’s recent announcement requires local exchanges to implement a continuous monitoring system for detecting unfair transactions and report any abnormal activities through a designated channel.
To assist virtual asset exchanges in meeting their legal obligations, the FSS has collaborated with exchanges to develop the “Abnormal Transaction Monitoring Guidelines.” This initiative supports the establishment of a regular surveillance system for detecting abnormal transactions. The new system is set to launch on July 19, along with the introduction of South Korea’s first regulatory framework for safeguarding crypto investors, known as the Virtual Asset User Protection Act.
In response to fears of potential mass delistings of tokens, the Digital Asset Exchange Alliance (DAXA) and 20 local exchanges have introduced the “Best Practices for Supporting Digital Asset Transactions” guideline. This document outlines a review process for digital assets and offers a more lenient approach for assets that have been traded for over two years on eligible overseas markets with strong regulations.
Regulatory Impact on Altcoins
Reports indicate that South Korean exchanges are reviewing the listing of more than 1,000 altcoins over the next six months to ensure compliance with regulatory requirements. This move has sparked concerns in the crypto community about the possible delisting of up to 600 coins. Despite these uncertainties, the regulatory initiatives signal South Korea’s proactive stance on crypto regulation.
Market Stability and Investor Protection
The regulatory changes are expected to bolster market stability, enhance investor protection, and combat financial crimes within the crypto sector. South Korea is striving to establish rigorous standards for exchange operations and consumer safeguarding, positioning itself as a frontrunner in addressing the challenges of the crypto industry. Market analysts view these regulatory efforts as crucial steps towards fostering a secure and trustworthy crypto ecosystem.
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