Financial regulators in South Korea have announced plans to begin “full-scale investigations” into “unfair crypto transactions.”
Per Daehan Kyungjae, the Financial Services Commission (FSC) announced on July 7 that it will create an “investigation system” that will begin operating on July 19.
South Korean Regulators: New Investigative System to Launch This Month
This means the new system will launch on the same day the Virtual Asset User Protection Act comes into force.
The Financial Supervisory Service (FSS), the other principal financial regulatory agency in the country, and the FSC will collaborate closely.
The bodies claim that by jointly establishing “a specialized organization” to look into “unfair virtual asset transactions,” they “have prepared” for the new act.
The regulators use the terms “price manipulation trading” and “using undisclosed information” to refer to cryptocurrency transactions.
Additionally, the regulators will go after businesses and people they believe are “trading self-issued coins” for personal gain.
The regulators will comb data they receive from crypto exchanges, and will also rely on reports submitted via the FSS’s new reporting center.
South Korean regulators are increasing pressure on local crypto exchanges to root out questionable trading, part of efforts to improve investor protection with a new digital-asset law that takes effect later this month. (Bloomberg) https://t.co/cYn8Ju8p05
— Financial Services Commission – FSC Korea (@FSC_Korea) July 4, 2024
Regulator to Work With Overseas Counterparts
The FSC declared that it would use its own monitoring systems to look into transactions further.
The body also stated that in order to help it find potential violators, it will employ IT “forensics,” “on-site data seizures,” and data investigation probes.
It further stated that it had “established a system of cooperation” with foreign cryptocurrency exchanges and regulators.
The regulator went on to say that it would investigate any questionable “cross-border” transactions, potential “hacking” incidents, and “anonymous transactions.”
The FSC further stated that it would look into cryptocurrency operators who assert that they have been the targets of hacking attacks in order to confirm the accuracy of their claims.
South Korea’s foreign exchange market will operate until 2 a.m. from Monday, while its crypto market is to enter a new phase with the enactment of the virtual asset user protection law this month, coming into place in the latter half of this year.https://t.co/Zuk6c7Ekco
— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) July 1, 2024
Biggest Crypto Offenders Could Face Life in Jail – Regulators
Convicted offenders would face “fines, warnings, and cautions,” according to the FSC.
In more severe situations, individuals found to be engaging in “unfair crypto trading practices” may spend more than “one year” behind bars.
Convicted offenders will be required to pay “three to five times” the amount they earned through “unfair” means under the regulator’s new “system of fines.”
More severe offenders may serve longer sentences of up to five years in prison. Furthermore, “unfair traders” may receive life sentences in the most severe circumstances.
A Financial Services Commission official explained that the new “investigation system” will activate “immediately” on July 19. The spokesperson concluded:
“The financial regulatory authorities will use all investigative means and capabilities at their disposal. We will establish a fair and transparent trading system in the virtual assets market.”