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South Korean Regulators Aim to Prevent Stolen Coins Dumping
South Korean regulators are taking steps to block traders from dumping stolen coins on the country’s crypto exchanges. This move comes in response to recent incidents involving hacked tokens and suspected illicit transactions.
Regulators’ Response to NFPrompt Hack
The Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) are leading the charge to prevent the trading of stolen assets on exchanges. This initiative follows a suspected hack on the NFPrompt (NFP) platform, where a South Korean trader allegedly purchased and then dumped NFP coins on the Coinone exchange.
Investor’s Alleged Involvement
On March 28, reports emerged of a domestic investor engaging in an over-the-counter (OTC) transaction with a hacker to acquire stolen assets. The investor’s social media post hinted at their knowledge of the coins’ origin, raising concerns about Coinone’s handling of the transaction.
Exchange and Regulators’ Actions
Coinone responded by placing NFP on its “investment cautionary coins” list due to security concerns. Regulators have pledged to investigate the incident, focusing on potential price manipulation and the impact on NFPrompt prices.
Enhancing Security Measures
Regulators are working on implementing the Virtual Asset User Protection Act in July, which includes measures to prevent unfair transactions. Exchanges are mandated to deploy systems to detect and prevent illegal or suspicious activities.
Future Plans and Industry Standards
Regulators plan to introduce provisions for restricting deposit and withdrawal activities on exchanges. They aim to establish industry-wide standards for swift communication of information on potentially illegal transactions to enhance security measures across all platforms.
Focus on OTC Transactions
Recent incidents have highlighted the risks associated with OTC transactions in South Korea. Regulators are committed to addressing these issues following reports of thefts related to such transactions.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
