According to data provided by the South Korean Financial Supervisory Service (FSS), a new system for monitoring large-scale transactions and transactions delayed for an extended period is now in the active implementation stage. This year, FSS introduced updated reporting standards for local cryptocurrency exchanges. These standards require exchanges to inform the agency of any suspicious transactions, which will improve control over financial operations in the cryptocurrency sector.
To identify abnormal transactions, FSS employs methods developed based on criteria from the Korean Exchange (KRX). The agency has created specialized models and metric indicators aimed at filtering out unusual transactions, which will allow for more efficient tracking and prevention of potential fraud. The main cryptocurrency exchanges in South Korea, where 99.9% of all transactions in the country take place, have already implemented their own monitoring systems based on these new criteria.
In order to increase monitoring efficiency, the regulator has recommended that exchanges establish specialized teams to track transactions. Exchanges should also actively use the FSS hotline to promptly report any transactions that violate local laws.
It is expected that the new monitoring system will come into effect on July 19, the day the Virtual Asset User Protection Law takes effect. This law requires cryptocurrency service providers to hold over 80% of deposits in «cold storage,» aimed at providing additional protection for user funds. Additionally, crypto companies are required to provide insurance programs that compensate users for losses in case of security breaches.
According to the latest FSS research, 80% of South Korean cryptocurrency platforms do not return funds to users in case of closure. In response to this, in April, the agency proposed stricter requirements for the listing of altcoins on cryptocurrency exchanges to enhance investor protection and improve overall market stability in the country.
