Crypto Watchdog Alert: South Korea Unveils Round-the-Clock Monitoring to Combat Fraud

According to a recent report, South Korea has taken a significant stride towards “enhancing the security and “integrity” of its cryptocurrency market.

On July 4, the nation’s financial watchdog, the Financial Supervisory Service (FSS), officially announced the launch of a 24-hour monitoring system aimed at detecting and addressing dubious activities within the crypto sector in the region.

According to the report, this system is part of a broader effort to implement South Korea’s first comprehensive crypto regulation later this month, marking a pivotal advancement in the nation’s approach to digital asset oversight.

Details of The 24-Hour Crypto Surveillance

Implementing these regulations comes at a crucial time, as the global crypto market faces fluctuations and the increasing necessity for structured oversight becomes apparent.

Set to commence operation on July 19, coinciding with the enactment of new crypto investor protection laws; the newly developed surveillance system represents a significant technological upgrade in market monitoring.

Developed in collaboration with local exchanges, this system aims to sift through transaction data to flag and investigate abnormal activities.

According to the report, by adopting advanced analytic models and indicators similar to those used by Korea Exchange (KRX), the FSS aims to ensure that the system is both “efficient and effective” in curbing potential frauds and manipulations in the market.

The FSS noted:

We benchmarked KRX’s (Korea Exchange) criteria in extracting abnormal transactions and prepared models and metric indicators through several simulations, which we expect will filter out abnormal transactions meticulously.

Furthermore, this initiative is supported by the cooperation of major exchanges that handle 99.9% of the digital currency transactions in South Korea, showing a unified front in the fight against illegal activities in the sector.

These platforms have integrated the FSS’s new criteria into their systems and established dedicated teams to monitor transactions continuously, highlighting the commitment to compliance and security.

South Korea’s Continous Regulation

This 24-hour surveillance system comes against the country’s continuous effort to intensify its digital currency regulations.

According to a recent report, the Digital Asset Exchange Alliance disclosed that regional exchanges will assess their altcoin listings to comply with upcoming investor protection laws effective July 19, reviewing 1,333 cryptocurrencies over the next six months, making immediate widespread delistings “unlikely.”

Regardless of this continuous regulation, the country still appears open to experimenting more with crypto. Yoon Jae-ok, leader of the People Power Party, recently proposed pro-crypto measures to attract voter support in the April elections, including endorsing initial exchange offerings (IEOs), corporate digital asset investments, and spot Bitcoin ETFs.

However, the Korea Institute of Finance has expressed concerns that these ETFs could divert significant capital from critical domestic markets to the volatile crypto sector, potentially damaging local industries and financial stability.

The institute warns that embracing such ETFs could increase financial market risks and reduce economic efficiency.

Featured image created with DALL-E, Chart from TradingView