South Korea’s financial regulator, the Financial Supervisory Service (FSS), will reportedly begin inspecting virtual asset exchanges for any suspicious or illegal transactions. The regulator aims to enforce market order and is prepared to advocate for regulatory revisions to address system deficiencies.
South Korea's Crypto Regulation
On July 19, South Korea’s 'Virtual Asset User Protection Act' came into effect, which includes measures such as insuring against hacks and malicious attacks on user crypto assets and keeping customer assets separate from the exchange’s assets.
Investor Protection Measures
The Financial Supervisory Service is authorized to inspect Virtual Asset Service Providers (VASPs) for compliance with their duties to protect users. The Financial Services Commission (FSC) is authorized to bring sanctions against rule-breakers, including issuing corrective orders, suspensions, and administrative fines.
Global Regulatory Trends
Alongside South Korea, several jurisdictions across the world are increasing scrutiny of digital asset trading platforms to protect crypto assets. In Hong Kong, operating an unlicensed virtual asset trading platform became a criminal offense as of June 1. In the UK, Coinbase’s local arm was fined $4.5 million for breaches related to user onboarding.
Regulation and the protection of cryptocurrency users have become increasingly relevant topics on the international stage. South Korea continues to refine its measures to ensure security and transparency in the cryptocurrency sector.
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