South Korean regulators are increasing pressure on local cryptocurrency exchanges to root out suspicious transactions, ChainCatcher reported. This is part of an effort to strengthen investor protection under the new digital asset law that will take effect later this month. The country's Financial Supervisory Service is setting up a system to monitor abnormal cryptocurrency trading activities and recommends that exchanges enter data and information into the system to ensure compliance with legislation that will take effect on July 19. Red flags include trading volumes and prices outside normal ranges, excessive trading volume, and unusually slow execution speeds.
Matt Younghoon Mok, senior foreign attorney and partner at Lee & Ko in Seoul, said the Financial Supervisory Service's guidelines "could pose a significant challenge to altcoins that are unable to quickly meet regulatory requirements." South Korean exchanges have begun reviewing the listings of more than 1,000 altcoins over the next six months to ensure they comply with the Virtual Asset User Protection Act. An industry body said Tuesday that an immediate "large-scale" delisting of altcoins is unlikely, dismissing the idea that the bill could quickly kill trading in some of the country's highly speculative tokens.