South Korea’s FSS to Inspect Virtual Asset Exchanges for Illegal Transactions

South Korea’s Financial Supervisory Service (FSS) announced on Tuesday its plan to conduct an unprecedented inspection of virtual asset exchanges in the country.

This move will be a novelty following the enactment of the stringent Virtual Asset Users Protection Act in July, which introduced severe penalties, including life imprisonment for illegal activities involving virtual assets valued at over 5 billion won (approximately $3.7 million).

The FSS’s upcoming inspection will focus initially on two cryptocurrency exchanges that operate using Korean won-based crypto exchanges. The FSS categorized these cases as “unusual cases” identified during preliminary reviews.

Even though there are four known Korean won-based exchanges in the country, the inspection will extend beyond these to include three additional cryptocurrency exchanges and a cryptocurrency wallet provider.

According to the FSS, there are other exchanges that could also be subjected to inspection if they are implicated in any suspicious activities or if complaints are lodged against them.

One of the primary objectives of the inspection is to uncover any illegal or unfair transactions within these platforms. Besides this, the scope of the investigation will also include verifying compliance with existing regulations, particularly those concerning the protection of virtual assets and the maintenance of accurate transaction records.

The FSS added that it is committed to maintaining market order through stringent enforcement of the law. The body warned that any illegal activities uncovered during the inspection would be met with severe punishment.

Apart from this, the FSS noted that this process could lead to further regulatory revisions if systemic issues are identified. The goal is to enhance the regulatory framework to better safeguard the interests of virtual asset users and ensure a fair and transparent trading environment.

According to local media outlet The Korea Times, “The FSS will establish market order through stern punishment against illegal activities that may be identified in the process of its inspection, and will push for the revision of regulations if necessary by identifying the areas in the system where improvements are needed”.

Analysis firm Statista states that South Korea has shown a significant level of acceptance toward cryptocurrencies. It revealed that around 10 percent of South Korea’s population had invested in cryptocurrencies in 2021 when Bitcoin prices reached an all-time high, which is more than twice the percentage in 2017.

The government of South Korea has given its citizens a green light with regard to cryptocurrencies, but via a series of stringent laws and regulations.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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