The Financial Supervisory Service (FSS), South Korea’s financial regulator, announced the integration of its transaction monitoring system with the country’s crypto exchanges. This integration will become operational on July 19, alongside the enforcement of its awaited Virtual Asset User Protection Act.
With that, the system will permit it to identify suspicious and illicit activity associated with 99.9% of crypto transactions conducted on onshore exchanges. So far, around 29 exchanges will be monitored, with questionable transactions reported to the FSS immediately.
Exchanges like Coinone, Bithumb, Korbit, and Upbit will comply with the monitoring system integration and the wider scope of the Virtual Asset User Protection Act. Transactions that launder money and manipulate the crypto market will be flagged for the FSS to act against.
A translated version of the press release issued by the regulator read, “With the enforcement of the Virtual Asset User Protection Act, unfair trade practices in the virtual asset market are prohibited, and virtual asset exchanges are required to monitor abnormal transactions at all times.”
Regarding the monitoring system, it said, “The Financial Supervisory Service jointly prepared the “Guidelines for Constant Monitoring of E-commerce” with exchanges to ensure the smooth fulfillment of the legal obligations of virtual asset exchanges and supported the establishment and operation of the e-commerce monitoring system.”
The Virtual Asset User Protection Act was passed after Terraform Labs’ collapse in the wake of its founder Do Kwon’s four-year sentence in Montenegro. He was a South Korean national, and Terraform Labs was licensed in South Korea to offer its services, although its main operational base was registered in Singapore.
With its collapse, billions of dollars were wiped out, leaving numerous investors reeling in losses and several entities going bankrupt. The South Korean government has claimed Terraform Labs’ failure is the largest financial fraud to occur in the country.
Image by Pete Linforth from Pixabay
