South Korea's Financial Supervisory Service (FSS) has developed a 24/7 surveillance system for local crypto exchanges that will monitor suspicious activity in the digital asset market.
According to the agency, FSS, the system should track large transactions and transactions whose execution is delayed for a long time. This year, the FSS has already introduced a standardized reporting format for local crypto exchanges, which must report suspicious transactions to the agency.
To identify abnormal transactions, FSS used the criteria of the Korea Exchange (KRX), preparing special models and metric indicators that should filter out any unusual transactions. Large exchanges, where 99.9% of cryptocurrency transactions are carried out in South Korea, have already created a monitoring system based on their own criteria, the department clarifies.
The regulator recommended that exchanges form a special team to monitor transactions. And also actively use the FSS hotline to promptly report transactions that violate local laws. The new system should be launched on July 19 - on this day the Law on the Protection of Users of Virtual Assets comes into force. The law obliges cryptocurrency service providers to keep more than 80% of deposits in “cold storage”, protecting user funds. Crypto companies are also required to provide insurance programs to compensate users for losses in the event of a security breach.
According to a recent FSS study, 80% of South Korean cryptocurrency trading platforms do not return money to users if they close. In April, the FSS proposed tightening the requirements for listing altcoins on cryptocurrency exchanges.
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