South Korea's financial regulator is developing a system to monitor unusual cryptocurrency trading and is urging exchanges to share internal data.

The Financial Supervisory Service (FSS) of South Korea is creating a system to oversee irregular crypto trading activities as part of the country's efforts to increase transparency and oversight in the crypto market.

In a statement on July 4, the agency called on domestic trading platforms to integrate their internal data with this system to ensure compliance with new legislation that takes effect on July 19.

The monitoring system will focus on trades outside normal volume and price ranges, large transactions, and unusually delayed executions, as per the FSS guidelines. Matt Younghoon Mok, a senior foreign attorney and partner at Lee & Ko in Seoul, told Bloomberg that these requirements could present "significant challenges for altcoins that cannot promptly meet regulatory standards."

According to reports, South Korean crypto exchanges will re-evaluate over 1,000 listed tokens due to the Virtual Asset User Protection Act, which aims to protect crypto investors' rights and interests.

Despite the extensive review, the Digital Asset Exchange Alliance, representing five major Korean exchanges, anticipates minimal "mass delistings" over the next six months, citing proactive regulatory compliance measures already implemented by domestic platforms. The regulations will affect nearly three dozen registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, which will conduct initial reviews to decide whether to retain or delist each token.

Under the new regulatory framework, crypto exchanges must set up a review committee to assess factors such as the reliability of the issuing entity, user protection measures, technology and security standards, and overall regulatory compliance.