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Highlights
- South Korea's regulators put significant pressure on crypto trading and crypto exchanges.
- Financial Supervisory Service a real-time system to increase oversight and monitor unusual crypto trading activity.
- Upbit and Bithumb faces significant decline in trading volumes.
- Crypto crackdown likely to delay market recovery.
South Korean regulatory crackdown against crypto has put significant pressure on crypto trading and crypto exchanges, causing an uptick in uncertainty among traders. The move comes as regulators in South Korea push to strengthen regulation under the new digital asset law that takes effect later this month. Experts believe that the guidelines could pose significant challenges to some altcoins.
South Korea Tightens Crypto Trading
The Financial Supervisory Service of South Korea on July 4 stated that a system to increase oversight and monitor unusual crypto trading activity is underway. Crypto exchanges are notified to feed data and details into the system as the Virtual Asset User Protection Act goes into effect on July 19.
While mass delisting is denied by South Korea’s Digital Asset Exchange Alliance (DAXA), the crypto body launched a 6-month review of over 1,300 digital assets to ensure compliance with the legislation.
Matt Younghoon Mok, senior foreign attorney and partner with Lee & Ko in Seoul, said FSS guidelines “could pose significant challenges for altcoins that cannot swiftly comply with regulatory requirements.” Trading over normal volume and price ranges, large transactions, and relatively slow execution are red flags that could lead to severe penalties.
Also Read: Ripple Vs SEC Update — Lawyers Reveal How SEC’s Reply Impact Final Decision
Why Global Crypto Market Recovery Could Delay?
South Korea holds a prominent position in the global crypto market, with the Korean won recently surpassing the US dollar as the most-used currency for crypto trading. Approximately 10% of the country’s population has exposure to digital assets, with smaller coins comprising the bulk of trading rather than Bitcoin.
According to the latest report by Korea Forbes, Upbit and Bithumb crypto exchanges are the top-ranked crypto apps in South Korea. However, the trading volumes have declined across the top crypto exchanges in South Korea, as per Kaiko.
Also Read: Crypto Market Crash — Why Bitcoin And Altcoins Are Falling
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