- South Korea’s financial regulator introduces a new system to monitor illicit activities in the crypto market.
- In collaboration with local crypto exchanges, the Financial Supervisory Service (FSS) develops a 24-hour surveillance mechanism.
- A new law enforcing digital asset user protection will go into effect on July 19th, bringing significant penalties for breaches.
Discover South Korea’s latest efforts to safeguard its digital asset market with a robust, 24/7 monitoring system to detect and prevent crypto-related fraud.
South Korea Implements Round-the-Clock Crypto Surveillance
South Korea’s Financial Supervisory Service (FSS) has taken a significant step toward enhancing the security of the nation’s crypto market by collaborating with local crypto exchanges to establish a 24-hour monitoring system. This initiative is part of a broader effort to enforce the country’s first digital asset user protection law, aimed at curbing illicit activities in the rapidly evolving digital asset space.
Details of the New Digital Asset User Protection Law
The new law, scheduled to go into effect on July 19th, seeks to eliminate various forms of unethical trading practices within the crypto market. It strictly prohibits market manipulation, certain trading activities, and the use of undisclosed, crucial information pertaining to digital assets. Violators of the law face severe penalties, including life imprisonment for illicit gains exceeding 5 billion won (approximately $3.76 million USD), along with significant fines ranging from three to five times the amount earned from the unlawful activities.
Context and Implications of the Law
This legislative move comes in the aftermath of the catastrophic collapse of Terraform Labs in 2022, a $40 billion crypto ecosystem co-founded by South Korean national Do Kwon. The repercussions of this collapse have underscored the urgent need for robust regulatory frameworks to protect investors and maintain market integrity. The monitoring system introduced by the FSS will facilitate crypto exchanges’ compliance with these new regulatory requirements, thereby fostering a safer and more transparent trading environment.
Conclusion
The introduction of a comprehensive digital asset user protection law in South Korea marks a pivotal moment in the nation’s approach to crypto regulation. By instituting a 24/7 surveillance system and imposing stringent penalties for violations, the FSS aims to create a more secure and trustworthy market for digital assets. As the new law takes effect on July 19th, it will be essential for market participants to adhere to these regulations to avoid severe consequences and contribute to the market’s overall stability.
