Regulation
Korean crypto exchanges to implement VAUPA.
- South Korean crypto exchanges to implement new monitoring systems by July 19
- The Virtual Asset User Protection Act (VAUPA) will introduce regulations aimed at preventing unfair business practices in cryptocurrencies.
South Korea has one of the most vibrant cryptocurrency industries in the world. The country is home to one of the largest cryptocurrency markets in the world, earning the name of a country heavily focused on altcoins.
According to Kaiko According to data, South Korea’s local currency was the most used for cryptocurrency trading in the first quarter of 2024. However, the country lacks clear regulations, leaving loopholes for unfair business practices.
South Korean authorities are now introducing new regulations.
New Cryptocurrency Regulations in South Korea
The Korea Financial Services Commission has been working on the VAUPA for the past five months. The protection for virtual asset users is expected to go into effect on July 19.
Accordingly, the law aims to prevent unfair business practices such as fraudulent transactions or price manipulation in the South Korean market.
Once this measure comes into force, authorities will have the legal mandate to trace crypto transactions through well-established and structured monitoring systems. These systems will help eliminate and track any fraudulent and suspicious activity.
According to the report of The financial tycoonsVarious exchange platforms, such as Upbit, are actively working on implementing systems to monitor unfair trading activities.
The law will require all exchange platforms to comply with and prove their compliance with established regulations.
South Korea tightens control over cryptocurrency market
Previous cryptocurrency laws in South Korea have sparked strong reactions, especially from foreign exchanges. For example, Binance and Japanese company Bitfront suspended operations in the country three years ago.
Crypto industry players see the new law as a way for the government to control the sector. With this regulation, the FSS will have the power to review all crypto transactions in order to identify and remove any red flags.
Similarly, the FSS will monitor cryptocurrency-related activities more closely. Thus, transactions with high volume, unusual price range, slow execution time and large amounts will attract the attention of the authority.
According to the authorities, these measures are aimed at strengthening the security of investors and protecting them from crypto crimes that lead to the loss of huge investments.
Impact on the crypto community
With the new regulation, regulators are increasing pressure on local cryptocurrency exchanges to remove all suspicious transactions in South Korea. This move is a victory for honest traders as it increases transparency, protecting them from fraud.
These regulations were designed to prevent disasters like the Terraform collapse in 2022, which left millions of users in trouble.
Similarly, through stakeholder self-regulation initiatives, investors will enjoy better protection and ensure that fewer cryptocurrency-related crimes occur.
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