South Korea’s Financial Supervisory Service (FSS) recently summoned the country’s top five cryptocurrency exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—for an urgent meeting. The focus was on recent increases in deposit usage fees, which have raised concerns under the newly enacted Virtual Asset User Protection Act.

The meeting was prompted by Bithumb’s announcement on July 23, 2024, to raise its usage fee rate from 2.2% to 4.0% per annum, a decision that was later retracted. The FSS is investigating whether these fee increases are reasonable and transparent, as required by the new regulations. The Act mandates that fees should be based on the business’s revenue and costs, and prohibits any concealment of the fee calculation processes.

During the meeting on July 24, 2024, the FSS requested detailed information from the exchanges on their deposit management and fee calculation processes. The regulator aims to ensure that these charges are justifiable and to eliminate any ambiguities regarding what constitutes reasonable rates.

This scrutiny is part of a broader regulatory shift in South Korea’s crypto market. The FSS has recently introduced systems to monitor suspicious trading activities, and exchanges are now required to report data on their transactions. This initiative aligns with the Virtual Asset User Protection Act’s goals to enhance user protection and market integrity.

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Additionally, the Digital Asset Exchange Alliance (DAXA) is conducting an extensive review of over 1,300 digital assets to ensure they comply with the new legal standards. The FSS has issued guidelines for detecting manipulative trading behaviors, such as high-frequency trading, large trades, atypical pricing, and delayed executions. Non-compliance with these guidelines could result in severe penalties.

These actions signal a new phase of rigorous regulation in South Korea’s cryptocurrency sector, emphasizing transparency, compliance, and consumer protection.

Source: coinfomania.com

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