South Korea’s regulatory crackdown on crypto has put crypto trading and exchanges under severe strain, leading to increased uncertainty among traders. The move comes as South Korean regulators push for stricter regulations under the new Digital Assets Act that goes into effect later this month. Experts believe the guidelines could pose a significant challenge for some altcoins.

South Korea tightens crypto trading

South Korea’s Financial Supervisory Service said on July 4 that a system is in the works to increase oversight and monitor unusual crypto trading activities. Crypto exchanges are being notified to feed data and details into the system as the Virtual Asset User Protection Act goes into effect on July 19.

While South Korea’s Digital Asset Exchange Alliance (DAXA) rejects mass delisting, the crypto organization has launched a six-month review of over 1,300 digital assets to ensure they comply with the law.

Matt Younghoon Mok, senior foreign policy attorney and partner at Lee & Ko in Seoul, said the FSS guidelines “may pose significant challenges for altcoins that cannot quickly comply with regulatory requirements.” Trading above normal volumes and price ranges, large trades and relatively slow execution are red flags that could lead to severe penalties.

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Why could the global crypto market recovery be delayed?

South Korea holds a prominent position in the global crypto market, with the Korean won recently overtaking the US dollar as the most widely used currency for crypto trading. Around 10% of the country’s population is exposed to digital assets, with smaller coins making up the majority of trading instead of Bitcoin.

According to the latest report from Korea Forbes, crypto exchanges Upbit and Bithumb are the topranked crypto apps in South Korea. However, trading volumes on South Korea’s largest crypto exchanges have declined, according to Kaiko.

Also Read: Crypto Market Crash — Why Bitcoin and Altcoins Are Falling

Varinder Singh

Varinder has 10 years of experience in the Fintech sector, of which 5+ years dedicated to blockchain, crypto and Web3 developments. As a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news stories, articles and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He currently covers all the latest updates and developments in the crypto industry.