The Financial Supervisory Service (FSS) in South Korea has developed a system to monitor suspicious transactions on cryptocurrency exchanges. The FSS has announced a collaboration with South Korean digital asset exchanges to establish this monitoring mechanism on July 4.
The Virtual Asset User Protection Act, approved in 2023 to regulate unfair trading practices and protect investors, will come into effect on July 19. Major crypto exchanges in South Korea have reportedly set up a system to identify and block suspicious transactions, covering nearly all trading activity in the country (about 99.9%).
These exchanges will notify the FSS of any questionable transactions through a specific data transfer channel once detected. Suspicious transactions include those aimed at engaging in illicit trading or market manipulation.
Among the 29 cryptocurrency exchanges registered with the FSS and monitored under the Virtual Asset User Protection Act are Upbit, Bithumb, Coinone, Korbit, and Gopax. The legislation also requires exchanges to implement stricter criteria for reviewing token listings.
South Korean authorities are evaluating the potential impact of listing investment vehicles on local exchanges following the authorization of spot Bitcoin and Ether exchange-traded funds by the US SEC. With a significant increase in funds flowing into the cryptocurrency market, experts caution that more research is needed before proceeding.
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