Korea to Combat “Unfair Trading” in Crypto with New Regulations Starting This Week

South Korean cryptocurrency exchanges are racing to implement new monitoring systems as the country's first comprehensive law on virtual asset user protection is set to take effect this Friday, July 19. The Virtual Asset User Protection Act (VAUPA) introduces stringent regulations aimed at preventing unfair trading practices in the crypto market.South Korea Tightens Crypto Trading Rules, Exchanges Implement New Monitoring SystemsThe new legislation requires crypto exchanges to establish robust monitoring mechanisms to detect and report suspicious activities to financial authorities. It specifically prohibits the use of insider information, market price manipulation, and fraudulent transactions.Dunamu, the operator of South Korea's largest cryptocurrency exchange, Upbit, is one of the first platforms to take a proactive approach by developing a new unfair trading monitoring system ahead of the law's implementation. The system, which builds upon existing monitoring infrastructure, incorporates order book information and advanced data analysis tools for integrated market analysis.“With the enactment of the Virtual Asset User Protection Act, it will become even more crucial for exchanges to prove their compliance capabilities,” a Dunamu official commented for Korea Times. “We will further improve our monitoring system of unfair trading to offer a safer environment for virtual asset investors.”???? Quick Look at Key Events This Week:#ETH Spot ETF May Launch South Korea's Virtual Asset User Protection Act to Take Effect#Lava Airdrop Goes LiveStay tuned for more updates! ????????#WikiBit #WikiBitinsight #crypto #blockchain #Ethereum #Airdrop https://t.co/73Nu6cbsHi— WikiBit Official (@WikiBitOfficial) July 15, 2024Industry experts emphasize the importance of the “order book information loading system” as a key component of the new monitoring requirements. The law mandates that exchanges preserve detailed trading records, including order book information, at the time of order placement, which is crucial for authorities to determine instances of unfair trading.The VAUPA also imposes penalties for unfair practices and includes restrictions on self-issued virtual asset trading. This comprehensive approach aims to enhance investor protection and market integrity in South Korea's rapidly evolving cryptocurrency landscape.As the deadline approaches, other exchanges in the country are expected to follow suit, implementing similar monitoring systems to comply with the new regulatory framework. The move signals South Korea's commitment to establishing a more transparent and secure environment for cryptocurrency trading.A Year of Work on VAUPAIn March last year, the South Korean National Assembly passed a law establishing a legal framework for regulating digital assets. Known as the Virtual Asset User Protection Act (VAUPA), this legislation defines digital assets and outlines penalties for illegal transactions.The Financial Services Commission (FSC) officially enacted VAUPA in February 2024. Set to take effect on July 19, 2024, the new law represents a significant advancement in regulating South Korea's cryptocurrency market. The legislation aims to curb market crimes and enhance transparency by prohibiting the use of undisclosed significant information in cryptocurrency transactions and activities related to market manipulation and illegal trading.The impetus for the Virtual Asset User Protection Act originated from a major industry upheaval involving Terraform Labs and its founder, Do Kwon, a South Korean national. The collapse of Terra in May 2022, which resulted in a market loss exceeding $450 billion, prompted South Korean lawmakers to address regulatory gaps and bolster investor protections swiftly. This article was written by Damian Chmiel at www.financemagnates.com.