South Korea’s Financial Supervisory Service (FSS) is set to introduce a “continuous monitoring system” for cryptocurrency transactions on exchanges starting July 19, in accordance with the Virtual Asset User Protection Act. This system, developed with South Korean digital asset exchanges, will enable the FSS to monitor and report suspicious activities, including market manipulation and other illegal trades.
Major exchanges like Upbit, Bithumb, Coinone, Korbit, and Gopax, which cover 99.9% of the country’s trading volume, are part of this initiative. The FSS aims to filter out abnormal transactions and notify the authorities through a dedicated data transmission line.
The Virtual Asset User Protection Act, passed in 2023, mandates stricter guidelines for token listings and imposes new compliance standards on crypto exchanges. This regulatory framework seeks to protect investors and ensure fair trading practices.
As of June 16, 29 crypto exchanges are registered with the FSS and subject to this monitoring. The new law reflects South Korea’s proactive approach to regulating the fast-evolving crypto market, ensuring transparency and consumer protection.
Additionally, South Korean officials are considering the implications of listing Bitcoin and Ether exchange-traded funds (ETFs) on local exchanges, following approvals by the United States Securities and Exchange Commission. However, further research is necessary to understand the potential capital inflow into the crypto market.
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