Coinspeaker
South Korea Cracks Down on Fraudulent Crypto Trading amid Tightening Regulations
The regulators in South Korea have recently stepped up pressure on local crypto exchanges asking them to eliminate questionable trading activities and take measures to improve investor protection.
In order to monitor unusual crypto trading activity, the Financial Supervisory Service has introduced a new system, said the agency in a statement earlier today, July 4. The FSS has asked the exchange to feed data into the system on a regular basis to ensure compliance with the legislation which will become active later this month on July 19.
As per the statement from the regulator, some of the red flags include trades happening outside normal volumes and price ranges. The exchange also needs to monitor big transactions and unusually slow execution. The FSS stated that one of its major goals is to find accounts linked to “suspected” activities.
South Korea is one of the most actively traded crypto markets worldwide. Earlier in 2024, the Won outperformed the USD as the most used fiat to swap in and out of digital assets. Nearly 10% of South Korea’s population actively trades in riskier smaller coins and altcoins.
“The FSS guidelines could pose significant challenges for altcoins that cannot swiftly comply with regulatory requirements,” stated Matt Younghoon Mok, senior foreign attorney and partner with Lee & Ko in Seoul, referring to a term used in the crypto sector for smaller digital assets.
South Korean Exchange Review Listing of Over 1000 Altcoins
Over the next six months, the South Korean exchanges will be reviewing the listing of more than 1,000 altcoins and ensuring compliance with the Virtual Asset User Protection Act. As reported earlier this week, the South Korean exchanges have already started preparing for new investor protection rules soon to arrive in the country.
However, an industry body stated that it is very unlikely that the exchanges will conduct “mass” delistings. Thus, the Virtual Asset User Protection Act won’t immediately choke the trading activity in speculative tokens reported Bloomberg.
Cryptocurrency markets have gained notoriety for practices like wash trading, which artificially inflate prices, and pump-and-dump schemes that result in significant investor losses. Global regulators are increasingly tightening regulations to exert more control over the digital asset marketplace.
Investors and traders are closely watching the implementation of new user protection rules and related provisions to gauge potential impacts on cryptocurrency prices.
South Korea Cracks Down on Fraudulent Crypto Trading amid Tightening Regulations
