South Korea to launch system to monitor crypto transactions in partnership with exchanges – DiarioBitcoin

The new tool will operate 24/7 and will allow the detection of suspicious and illicit operations. Since exchanges process 99% of crypto transactions, these will be the entities that apply the new surveillance system starting next July 19.

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• South Korean government unveils system to monitor crypto transactions
• This will be operated in partnership with exchanges starting July 19
• The system will monitor transactions 24/7, and exchanges will report suspicious activities to authorities.
• The measure is part of the new crypto regulations that will come into force in the coming days.

South Korea continues to refine its mechanisms for monitoring cryptocurrency operations, and the local government recently introduced a 24/7 surveillance system that will work in partnership with exchanges to detect suspicious activities in this market.

Monitoring tool for the South Korean crypto market

This was announced by the Financial Supervisory Service of South Korea (FSS) In a press release published this week, they indicate that this new system will begin to operate from July 19, the day on which the first regulations for the protection of investors in the cryptocurrency market come into force.

“As the Virtual Asset User Protection Act comes into force on July 19, 2024, unfair business practices in the virtual asset market are prohibited and virtual asset exchanges must constantly monitor abnormal transactions.”he indicated FSS.

As for the new system, although there are not many details, the FSS He indicated that abnormal transaction monitoring guidelines were prepared, which were established jointly with the exchanges, and which are part of the regular surveillance system that will begin to operate. “We evaluated the criteria of KRX (Korea Exchange) to extract abnormal transactions and prepared models and metric indicators through various simulations, which we hope will filter out abnormal transactions meticulously”the statement reads.

As for the application by the exchanges, the FSS He said that the main local platforms process around 99% of crypto transactions in the country, so these are the entities that must monitor the operations. Therefore, they now manage a direct line with the regulator to report transactions that may be violating local laws.

Each exchange must have a team dedicated exclusively to monitoring suspicious transactions, which will carry out the necessary investigation with data Blockchain to determine whether there is a potential crime. They should also pay attention to the use of tokens for irregular operations, market manipulation, data falsification and other illegal acts.

Very demanding legal frameworks

As is well known, South Korea has one of the most active crypto markets in the world, but also some of the most rigid and demanding regulations in the industry internationally.

In mid-2023, South Korean lawmakers approved a bill to protect consumers in the cryptocurrency market. Comprised of a series of rules, the legislation covers market manipulation, illegal trading, and other violations involving digital assets that can result in criminal penalties or fines, depending on the severity of the offense.

It is this regulation that will come into force in the coming days, which also introduces harsher penalties for actors who commit crimes related to cryptocurrencies, including the possibility of a life sentence.

The country’s new rules also require domestic companies that issue or hold cryptocurrencies to provide detailed disclosures about their assets, a requirement that extends to South Korean officials holding funds in digital currencies, information that can be made public.

Regarding ETFs Bitcoin, Given the interest in many countries to launch this product, the Korea Institute of Finance He does not consider it a good idea for these products to reach the local market, since they could bring more problems than benefits to the nation’s economy.

Article by Angel Di Matteo / Bitcoin Diary

Picture of Unsplash

WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be appropriate for retail investors, as the total amount invested could be lost. Check the laws of your country before investing.