As a seasoned crypto investor with roots in South Korea, I find the recent announcement by the Financial Supervisory Service (FSS) both reassuring and intriguing. Having navigated the crypto market for years, I’ve seen my fair share of shady practices and questionable exchanges.
The Financial Supervisory Service (FSS) of South Korea has revealed its intention to carry out an extensive review of virtual asset trading platforms, with the aim of identifying and preventing any unlawful transactions.
For the first time since the enactment of the Virtual Asset User Protection Act in July, we will be conducting an inspection on virtual asset providers. This review aims to ensure compliance with the new regulations and adherence to industry standards without breaching any guidelines.
Targeting Top Major Exchanges for Inspection
As an analyst, I’ve learned that a greater focus is shifting towards significant digital exchanges, specifically Upbit, Bithumb, Coinone, Gopax, and Korbit, in our region. Furthermore, it has been disclosed that the regulatory body will conduct comprehensive inspections on six additional entities, which encompass the Coin Market Exchange, digital wallets, and custodians.
Based on certain activities, our choices for inspection will be made. Following FSS guidelines, these selections will take into account both the influence of a business’s activities on the market and the degree to which they safeguard their users. With this strategy in mind, we have chosen to inspect two Won Market exchanges as our targets.
Furthermore, we’ll carry out checks directly at the premises of operators who have a less secure financial status and internal controls, as these might pose a threat to consumer safety.
Ensuring Compliance with Regulations and User Protection
The regulatory body announced that they will examine various facets, including verifying whether the operator’s user protection complies with the user protection standards outlined in the Virtual Asset Act. Put simply, they said they will ensure the operator is adhering to the user protection guidelines as specified by the Virtual Asset Act.
We’ll examine how well rules about storing and handling user belongings are being followed. This includes verifying the terms in contracts with management firms like banks, ensuring they’re fair, and making sure deposit fees for usage are correctly calculated and paid.
Businesses potentially lacking in user protection measures may undergo thorough examinations. Additionally, compliance with rules prohibiting unscrupulous trading activities will be scrutinized.
Additionally, we’ll review the adherence to regulations regarding unjust trade practices. We’ll ensure that regular surveillance of unusual transactions is justified, including identifying anomalies in pricing trends and transaction volumes, and assess whether such ongoing monitoring system is necessary and effective.
As a researcher within our team at the FSS, I’m excited to share that we’re transitioning towards a more flexible inspection system. This means we’ll be able to swiftly dispatch our inspection personnel to address any pressing issues or concerns as they arise. Moreover, it’s been highlighted that our regulatory body intends to establish a robust market order by enforcing stringent regulations. The goal is twofold: first, to deter illegal activities, and second, to empower businesses in enhancing their self-regulation capabilities.
This examination is a component of South Korea’s initiative to maintain a properly controlled virtual asset industry, with a focus on safeguarding consumers. The nation has previously enacted the Virtual Asset User Protection Act, which took effect in July, stipulating that any crypto operator found guilty of amassing over 5 billion won through illicit transactions faces a penalty of life imprisonment.
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2024-09-03 17:22