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South Korea to Launch Regular On-Site Crypto Inspections

• South Korean financial regulators will start conducting “regular” on-site inspections at domestic crypto firms this year
• The inspections will not only involve exchanges, but also wallet operators and crypto custody-related firms
• The FSC conducted special probes at several crypto companies following what was dubbed the “Terra/LUNA Incident” in May

South Korean financial regulators have announced plans to carry out regular on-site inspections of domestic crypto firms this year. The Financial Services Commission (FSC) and its Financial Intelligence Unit (FIU) will be conducting the inspections, and will be looking into not just crypto exchanges, but also wallet operators and crypto custody-related firms.

The announcement follows the ‘Terra/LUNA Incident’ in May, which saw thousands of South Koreans lose money due to the collapse of Terra ecosystem coins. In response to this, the FSC and FIU have pledged to strengthen investor protection in the crypto sector and reduce money laundering risks.

Currently, there are 36 registered crypto-asset operators in South Korea. The FSC has said it will use investigation methods similar to those used to probe traditional financial companies. This includes financial and accounting reviews, as well as on-site inspections.

The FIU is in charge of issuing licenses to crypto operators. The media outlets have reported that the regulators plan to have the inspection system up and running by the end of this year.

It is clear that South Korean regulators are taking steps to increase scrutiny of crypto companies. This shows that the country is becoming serious about the regulation of the crypto market, which is a positive step forward. With the implementation of these measures, investors can feel more secure when trading digital assets.