The financial regulator here said  it will soon launch an inspection of virtual asset exchanges to check for any illegal or unfair transactions, as India cracks down on crypto platforms. 

The planned inspection will be the first of its kind since the country introduced tougher rules against illegal trading of virtual assets in July under the new Virtual Asset Users Protection Act, which enabled maximum punishment of life imprisonment for those who gain more than 5 billion won ($3.7 million) through illegal transactions.

The Financial Supervisory Service (FSS) said it will inspect two South Korean won-based cryptocurrency exchanges, considering what it called “unusual cases” detected in earlier reviews, reports Yonhap news agency.

There are said to be a total of four Korean won-based exchanges in the country.

In addition, three more cryptocurrency exchanges and one cryptocurrency wallet provider will come under the planned inspection, as well as any other exchanges when and if any problems or complaints are filed against them, the FSS added.

The inspection will check for any illegal or suspicious transactions, but will also seek to make sure the exchanges and related businesses are complying with regulations that include protection of virtual assets and keeping records of virtual asset transactions, according to the financial regulator.

“The FSS will establish market order through stern punishment against illegal activities that may be identified in the process of its inspection, and will push for the revision of regulations if necessary by identifying the areas in the system where improvements are needed,” it said.

In India, the government country has put robust anti-money laundering rules and a tax structure for cryptocurrencies in place, and the Enforcement Directorate (ED) has been busting fake cryptocurrency rackets across the country.

In 2022, the Indian government introduced a 30 per cent tax on virtual currencies and a 1 per cent deduction for every crypto transaction.