David Edwards
South Korea’s Financial Supervisory Service (FSS) has initiated on-site inspections of cryptocurrency exchanges, starting with Bithumb as the first platform under review. The inspections, set to commence after the Chuseok holiday, mark the FSS’s first thorough examination of virtual asset service providers (VASPs) under the recently implemented regulatory framework.
Focus on Compliance with New Crypto Laws
The inspections will primarily evaluate Bithumb’s compliance with the newly established Virtual Asset User Protection Act. This legislation, designed to enhance safety and transparency in South Korea’s cryptocurrency sector, mandates that VASPs meet strict standards. The FSS will scrutinize how Bithumb safeguards customer funds, ensures operational transparency, and implements robust measures to secure customer data.
Combatting Market Manipulation and Illegal Activities
A significant part of the review will assess Bithumb’s efforts to prevent market manipulation, insider trading, and other illegal activities. As the crypto market continues to grow, regulators are increasingly concerned with these practices, which threaten market integrity.
Virtual Asset User Protection Act: Key Provisions
The Virtual Asset User Protection Act introduces comprehensive measures aimed at tightening anti-money laundering (AML) and know-your-customer (KYC) compliance. These new regulations are designed to protect users and prevent fraudulent activities within the market.
In a broader scope, the FSS is also examining other major exchanges, such as Upbit, to identify potential violations and monitor for suspicious transactions in real-time.
