The regulator overseeing South Korea’s financial institutions is unveiling a new surveillance system for illicit crypto activities as the nation prepares to enforce its first digital asset user protection law.
In a new statement, the Financial Supervisory Service (FSS) says that it has collaborated with local crypto exchanges to develop a 24-hour monitoring system for suspicious transactions in the crypto space.
The system will become operational once the Virtual Asset User Protection law takes effect on July 19th.
The new law aims to prohibit crypto market manipulation, certain types of trading activities and use of undisclosed important information regarding digital assets.
Violators of the new law face serious consequences, such as life imprisonment for illegal profits of more than $5 billion won, or around $3.76 million USD, and hefty fines equivalent to three to five times the amount earned from the violation.
The FSS is rolling out a monitoring system with the aim of easing crypto exchanges’ compliance with their legal obligations.
“With the enforcement of the Virtual Asset User Protection Act, unfair trading in the virtual asset market is prohibited, and the virtual asset exchange must keep an audit of abnormal transactions.”
The fourth largest economy in Asia is adopting the crypto user protection law following the $40 billion collapse of Terraform Labs in 2022, a crypto ecosystem co-founded by South Korean national Do Kwon.
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