According to the agency, FSS, the system should track large transactions and transactions whose execution is delayed for a long time. This year, the FSS has already introduced a standardized reporting format for local crypto exchanges, which must report suspicious transactions to the agency.
To identify abnormal transactions, FSS used the criteria of the Korean Stock Exchange (KRX), preparing special models and metric indicators that should filter out any unusual transactions. Large exchanges, which account for 99.9% of cryptocurrency transactions in South Korea, have already created a monitoring system based on their own criteria, the agency clarifies.
The regulator recommended that exchanges form a special team to monitor transactions. And also actively use the FSS hotline to promptly report transactions that violate local laws.
The new system should be launched on July 19 — the Law on the Protection of Users of Virtual Assets comes into force on this day. The law obliges cryptocurrency service providers to keep more than 80% of deposits "in cold storage", protecting users' funds. Crypto companies are also required to provide insurance programs to compensate for user losses in the event of a security breach.
According to a recent FSS study, 80% of South Korean cryptocurrency trading platforms do not refund money to users in case of closure. In April, the FSS proposed to tighten the requirements for placing altcoins on cryptocurrency exchanges.