South Korea launches crackdown on suspicious crypto activities

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South Korea is trying to rid its crypto sector of crooks who are exploiting digital assets to fuel illegal activities such as money laundering. The country is cracking down on crypto activities that look suspicious or unusual on crypto exchanges operating in the Asian nation. On Thursday, July 4, the Financial Supervisory Service of Korea issued a statement alerting all crypto exchanges to increase monitoring of transactions on their respective platforms.

Seoul has instructed all crypto exchanges to enter the required data and details into the Virtual Asset Unfair Trade Monitoring System. The system will be fully functional in the coming days. There is no clarity yet on what details the system will require from exchanges.

This step has been taken by South Korea at a time when the country’s Virtual Asset User Protection Act is going to come into force from July 19.

In an official statement shared on Thursday, the FSS said that these measures were urgent and important to prevent unusual crypto transaction incidents by keeping them under constant scrutiny.

Cryptocurrencies that fail to comply with South Korea’s regulatory guidelines may face operational challenges in the country.

South Korea’s crypto plans

In June this year, South Korean authorities directed all crypto exchanges to investigate the cryptocurrencies listed on their respective platforms.

These crypto trading platforms were also asked to conduct a thorough review of their internal operations to identify any security or technical flaws.

To mitigate the risk of financial instability posed by volatile crypto assets, South Korea also banned the purchase of cryptocurrencies via credit cards in January this year.

Asian nations focusing on crypto regulation

Digital assets have seen a surge in Asia due to the technology and gaming culture prevalent in countries such as Japan, Vietnam, South Korea, and India. Under these circumstances, South Korea is not the only country that is intensifying its efforts to bring in effective legislation to regulate the digital asset industry.

India has also imposed several regulatory requirements on crypto firms to ensure that their services and offerings do not mislead citizens into unexpected financial losses. For example, all crypto firms that wish to operate in India must first secure registration with the Financial Intelligence Unit (FIU).

Japanese Prime Minister Fumio Kishida also does not shy away from expressing his support for the growth and development of Web3 in Japan.

A report by Chainalysis in 2022 claimed that in the second quarter of 2022, 58 percent of web traffic to crypto services from Asian countries was related to NFTs, while another 21 percent of traffic was related to play-to-earn blockchain games.


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