The Financial Supervisory Service (FSS) of South Korea will conduct inspections of virtual asset exchanges to detect suspicious and illegal transactions, aiming to strengthen investor protection in the cryptocurrency sector.
According to local media, the FSS will conduct inspections of major exchanges such as Upbit, Bithumb, and Coinone to assess their compliance with current regulations. The FSS will look for suspicious transactions and ensure that exchanges and related companies fully fulfill their obligations to protect users and comply with legal regulations.
Illegal activities, if detected, will face severe penalties, and the agency is ready to propose regulatory amendments if it finds loopholes in the current system.
The move comes after South Korea's "Virtual Asset User Protection Act" took effect on July 19, setting out a number of regulations to protect cryptocurrency investors. The law requires exchanges to have insurance against cyberattacks and to separate customer assets from the exchange's assets.
Nguá»n:  Financial Services Commission
The Financial Services Commission (FSC) of South Korea has emphasized that the FSS has the authority to inspect virtual asset service providers (VASPs) to ensure that they comply with their user protection obligations. The FSC also has the authority to impose sanctions on those who violate these regulations.
South Korea is among a number of countries that are increasing scrutiny of the cryptocurrency market. In Hong Kong, operating an unlicensed virtual asset exchange became a criminal offense on June 1. In the UK, Coinbase was fined $4.5 million for breaching a voluntary agreement regarding user onboarding.
