South Korea to conduct inspection of Crypto Exchanges for illegal transactions
The Financial Supervisory Service (FSS), a South Korean regulator, is reportedly preparing to begin inspection of cryptocurrency exchanges for any illegal or suspicious transactions.
According to the Korean Times, a local news outlet that quoted the regulator, the FSS will enforce the market order with severe penalties for any illegal activity discovered during inspections and will push for regulatory changes if necessary to fix flaws in the system.
"The FSS will push for the review of regulations if needed by identifying the areas in the system where improvements are required and will set up market order through strict punishment against illegal activities that may be found in the course of its inspection," the statement read.
In addition to looking for any illegal or suspicious activity, the financial regulator says the planned inspection will also verify that the exchanges and related companies are adhering to rules that protect virtual assets and require them to maintain records of such transactions.
With the passage of the new Virtual Asset Users Protection Act in July, which increased the maximum penalty to life in prison for anyone making more than $3.7 million—around $5 billion won through illegal transactions—the planned inspection will be the first of its kind since the nation's illegal virtual asset trading laws became more stringent.
In light of what it described as "unusual cases" found in previous reviews, the FSS announced that it will inspect two crypto exchanges out of a total of four Korean won-based exchanges in the country.
The FSS also stated that any additional exchanges that have issues or complaints made against them will also be included in the planned inspection, along with three more crypto exchanges and one virtual asset wallet provider.
Cryptocurrencies such as Bitcoin (BTC) in South Korea are subject to particular securities and anti-money laundering laws that are upheld by the Financial Securities Commission. South Korea's regulations governing crypto service providers' reporting are mostly based on guidelines rather than laws.
In an effort to safeguard cryptocurrency assets, a number of global jurisdictions, including South Korea, are closely examining digital asset trading platforms. As of June 1, running an unlicensed virtual asset trading platform in Hong Kong is now illegal. The city's regulator granted preliminary approval to some applicants, but they have not yet been granted full licenses.
Disclaimer: This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.