CoinDesk Reports:
South Korea’s financial regulators are rolling out a new system to monitor illicit crypto activities as the country prepares to enforce its first Digital Assets User Protection Law.
In a recent statement, the Financial Supervisory Service (FSS) announced that it has collaborated with local cryptocurrency exchanges to develop a system for monitoring suspicious transactions in the cryptocurrency space around the clock.
The system will go live starting July 19, once the Virtual Asset User Protection Law takes effect.
The new law aims to prohibit market manipulation, certain types of trading activities, and the use of undisclosed significant digital asset information. Individuals found violating the new law face severe consequences, such as lifetime imprisonment for illicit profits exceeding 5 billion South Korean Won (approximately $3.76 million), along with fines up to three to five times the illegal gains.
FSS is introducing a monitoring system aimed at ensuring cryptocurrency exchanges comply with their legal obligations.
“With the implementation of the Virtual Asset User Protection Law, unfair transactions in the virtual asset market will be prohibited, and cryptocurrency exchanges must audit abnormal transactions,” the statement read.
This move comes as South Korea, the fourth-largest economy in Asia, moves forward with cryptocurrency user protection laws following the collapse of Terraform Labs in 2022, a cryptocurrency ecosystem co-founded by South Korean national Do Kwon.