South Korea's Financial Supervisory Service (FSS) is launching a thorough investigation into crypto exchanges to root out illegal activities and ensure compliance with new regulations ¹. The initial focus will be on two exchanges that have raised red flags for suspicious activity.
Inspections to Prevent Money Laundering and Illicit Transactions
The FSS will examine these exchanges to prevent money laundering and identify any illicit transactions ². This move comes after the Virtual Asset User Protection Act was enacted in July, which imposes severe penalties for illegal crypto dealings, including life sentences for those making illegal profits over 5 billion won ³.
Exchanges Under Scrutiny
Major exchanges like Upbit, Bithumb, and Coinone will be scrutinized to ensure they're complying with the new regulations ⁴. The FSS aims to identify and address any unfair practices within these exchanges.
Virtual Asset User Protection Act
The Virtual Asset User Protection Act provided the FSS with the authority to conduct these inspections ⁵. The act was enacted to protect users and prevent illegal activities in the crypto space.
Conclusion
The FSS's move to inspect crypto exchanges is a significant step towards regulating the crypto market in South Korea. By identifying and preventing illegal activities, the FSS aims to create a safer and more transparent environment for crypto users.
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