South Korea is trying to rid its crypto sector of criminals who misuse digital assets to facilitate illegal activities such as money laundering. The country is cracking down on crypto activities that appear suspicious or unusual on crypto exchanges operating in the Asian country. On Thursday, July 4, the Financial Supervisory Service of Korea issued a statement warning all crypto exchanges to increase transaction monitoring on their respective platforms.
Seoul has directed all crypto exchanges to enter the required data and details into the Virtual Asset Unfair Trade Monitoring system. This system will be fully functional in the coming days. There is no clarity yet on the details that the system would require from the exchanges.
The move by South Korea comes as the country’s Virtual Asset User Protection Act takes effect. Reportedly ready to come into effect on July 19.
In an official statement shared on Thursday, the FSS said these measures are urgent and important to curb abnormal crypto transactions through continuous scanning.
Cryptocurrencies that do not comply with South Korea’s regulations may face operational challenges in the country.
South Korea’s Crypto Plans
In June this year, South Korean authorities ordered all crypto exchanges to investigate the cryptocurrencies offered on their platforms.
These crypto trading platforms were also asked to conduct a thorough maintenance assessment of their internal operations to identify any security or technological deficiencies.
To reduce the risk of financial instability posed by unstable cryptocurrencies, South Korea also banned the purchase of cryptocurrencies via credit cards in January this year.
Asian countries focus on crypto regulations
Digital assets have seen growth in Asia, due to the culture of technology and gaming prevalent in countries such as Japan, Vietnam, South Korea and India. South Korea, under the circumstances, is not the only country stepping up its efforts to implement effective laws to govern the digital asset industry.
India has also implemented a number of regulatory mandates for crypto companies to ensure that their services and offerings do not mislead citizens into unforeseen financial losses. For example, all crypto companies that want to operate in India must first secure a registration with the Financial Intelligence Unit (FIU).
Japanese Prime Minister Fumio Kishida is also not shy about expressing his support for the growth and development of Web3 in Japan.
A report from Chain analysis in 2022 claimed that in the second quarter of 2022, 58 percent of web traffic from Asian countries to crypto services was NFT-related, while another 21 percent of traffic was related to play-to-earn blockchain games.
