South Korean Regulators: New Investigative System to Launch This Month

South Korean financial regulators will launch full-scale investigations into unfair crypto transactions.

Per Daehan Kyungjae, the Financial Services Commission (FSC) announced on July 7 that it will create an investigation system that will begin operating on July 19. This means the new system will launch the same day the Virtual Asset User Protection Act comes into force.

The FSC will work closely with the nation's other central financial regulatory body, the Financial Supervisory Service (FSS). The bodies say they have prepared for the new act by co-creating a specialized organization for investigating what they term unfair virtual asset transactions.

The regulators mean crypto transactions made using undisclosed information and price manipulation trading. They will also target companies and individuals they suspect of trading self-issued coins to their benefit.

The FSC said it would also probe transactions using its monitoring systems. The body added that it will use data investigation probes, on-site data seizures, and IT forensics to help it identify possible violators.

It added that it had established a cooperation system with overseas regulators and foreign crypto exchanges. The regulator said it would look at suspicious cross-border transactions, possible incidences of hacking, and anonymous transactions.

Furthermore, the FSC noted that it would investigate crypto operators who claim they have fallen victim to hacking attacks to verify the integrity of their claims. The FSC said it would punish convicted offenders with fines, warnings, and cautions.

In more severe cases, those caught using unfair crypto trading practices could be jailed for over one year. The regulator will introduce a system of fines, with convicted offenders ordered to pay three to five times the amount they earned using unfair methods.

Biggest Crypto Offenders Could Face Life in Jail - Regulators

More extreme offenders could face longer jail terms of up to five years. In the most severe cases, unfair traders could be handed life sentences.

A Financial Services Commission official explained that the new investigation system will activate immediately on July 19. The spokesperson concluded:

"The financial regulatory authorities will use all investigative means and capabilities. We will establish a fair and transparent trading system in the virtual assets market."