South Korea sets up 24-hour surveillance system to combat fraud

South Korea has taken a major step forward to “improve the security and integrity” of its cryptocurrency market, according to a recent report.

On July 4, the Financial Supervisory Service (FSS), the country’s financial watchdog, officially announcement the launch of a 24-hour surveillance system aimed at detecting and treating suspicious activities within the crypto sector in the region.

According to the report, the system is part of a broader effort to implement South Korea’s first comprehensive cryptocurrency regulation later this month, marking a major step forward in the country’s approach to digital asset monitoring.

24 Hour Crypto Monitoring Details

The implementation of these regulations comes at a crucial time, as the global cryptocurrency market faces fluctuations and the growing need for structured oversight becomes evident.

Scheduled to begin operation on July 19, coinciding with the enactment of new laws on the protection of cryptocurrency investors, the newly developed surveillance system represents a significant technological upgrade in market monitoring.

Developed in collaboration with local exchanges, the system aims to sift through transaction data to flag and investigate abnormal activity.

According to the report, by adopting advanced analytical models and indicators similar to those used by the Korea Exchange (KRX), the FSS aims to ensure that the system is both “effective and efficient” in curbing potential market fraud and manipulation.

The FSS noted:

We evaluated KRX (Korea Exchange) criteria for extracting abnormal transactions and prepared models and metric indicators through multiple simulations, which we believe will meticulously filter out abnormal transactions.

Furthermore, this initiative is supported by the cooperation of major exchanges that handle 99.9% of digital currency transactions in South Korea, thus showing a united front in the fight against illegal activities in the sector.

These platforms have integrated the new FSS criteria into their systems and have set up dedicated teams to monitor transactions continuouslyemphasizing commitment to compliance and security.

Regulation continues in South Korea

The 24-hour surveillance system runs counter to the country’s ongoing efforts to tighten its regulation of digital currency.

According to a recent report, the Digital Asset Exchange Alliance revealed that regional exchanges evaluate their altcoin lists to comply with upcoming investor protection laws effective July 19, reviewing 1,333 cryptocurrencies over the next six months, making immediate and widespread delistings “unlikely.”

Despite this continued regulation, the country still appears open to further experimentation with cryptocurrency. Yoon Jae-ok, leader of the People’s Power Party, recently Proposed cryptocurrency measures to attract voter support in the April election, including approving initial exchange offerings (IEOs), corporate digital asset investments, and Bitcoin spot ETFs.

However, the Korea Institute of Finance has expressed concerns that these ETFs could diverting significant capital from critical domestic markets to the volatile cryptocurrency sector, which could harm local industries and financial stability.

The institute warns that the adoption of such ETFs could increase risks in financial markets and reduce economic efficiency.

The value of the global market capitalization of digital currencies on the 1-day chart. Source: Crypto TOTAL Market Cap on TradingView.com

Featured image created with DALL-E, chart by TradingView

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