The Financial Supervisory Service (FSS) of South Korea has declared the opening of a 24-hour surveillance system with the goal of identifying and stopping fraudulent activity in the cryptocurrency space.
The FSS said in the press release that this project is in line with the Virtual Asset User Protection Act, which will go into effect on July 19 and is South Korea’s first comprehensive crypto law.
From January to May of this year, the FSS worked closely with local exchanges to build a real-time surveillance system. It implemented a standard reporting format for transaction data submissions, derived from the Korea Exchange (KRX), to identify any unusual activity.
The system is designed to meticulously filter out unusual transactions using models and metric indications generated by simulations. Major local exchanges, which handle 99.9% of all cryptocurrency trading in South Korea, the agency continued, have already constructed the monitoring system using its most recent standards.
The FSS recommended that exchanges set up specialized monitoring teams and make use of auditing data, including on-chain data, to find evidence of illicit activity. The agency stated that using a token’s secret information for unfair trading, manipulating prices, or fabricating circulation data are examples of illicit acts in the cryptocurrency space.
It made it easier for exchanges to report questionable transactions quickly by providing a hotline, and strengthening regulatory monitoring.
The Virtual Asset User Protection Act, South Korea’s first cryptocurrency law, will become fully operative on July 19. It seeks to outlaw unethical behaviors in cryptocurrency investment, including using confidential information for personal gain and manipulating markets. It mandates that suppliers guarantee 80% of deposits in cold storage and give users compensation insurance.
Legislators in the country are currently working on a follow-up bill to the User Protection Act, wherein issues like regulating stablecoins and permitting institutional cryptocurrency trading are being deliberated.
South Korean exchanges have adopted a new code of conduct and are reviewing 1,333 cryptocurrencies traded domestically, aiming to strengthen market integrity and boost investor confidence in regulated crypto markets, shaping future regulation in South Korea.
