CoinDesk reports:
The regulatory agency overseeing financial institutions in South Korea is rolling out a new system to monitor illicit crypto activities as the country prepares to enforce its first-ever Digital Asset User Protection Law.
In a recent statement, the Financial Supervisory Service (FSS) disclosed that it has collaborated with local cryptocurrency exchanges to develop a system that monitors suspicious transactions in the cryptocurrency space around the clock.
Once the Virtual Asset User Protection Law takes effect on July 19, the system will commence operations.
The new legislation aims to prohibit market manipulation in the cryptocurrency space, certain types of trading activities, and the use of undisclosed significant digital asset information.
Those found violating the new law face severe consequences, including lifetime imprisonment for illicit profits exceeding 5 billion South Korean won (approximately $3.76 million), in addition to fines equivalent to three to five times the illegal gains.
The FSS is rolling out a monitoring system aimed at easing compliance burdens on cryptocurrency exchanges with their legal obligations.
“With the implementation of the Virtual Asset User Protection Law, unfair trading practices in the virtual asset market are prohibited, and cryptocurrency exchanges must audit abnormal transactions,” stated the agency.
South Korea, Asia’s fourth-largest economy, is implementing the cryptocurrency user protection law following the collapse of Terraform Labs in 2022 with $40 billion, a cryptocurrency ecosystem co-founded by South Korean national Do Kwon.
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