Highlights:
- South Korea will review over 600 cryptocurrency listings starting next month under new regulatory measures.
- Reviews will assess token reliability, user protection, technology standards, and regulatory compliance.
- Exchanges must conduct quarterly reviews, with problematic tokens facing potential delisting.
Starting next month, South Korea will intensify scrutiny over the 600 cryptocurrencies listed on its domestic exchanges, prompted by the enforcement of the new Virtual Asset User Protection Act. According to the report from Dnews, the law mandates a rigorous review framework to safeguard investors and ensure compliance with stringent regulatory standards.
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South Korea cracks down on #crypto! 🇰🇷 Exchanges must review ALL 600+ listed tokens for compliance or face delisting. New virtual asset user protection🛡️ law coming July 19th! #Token #exchanges
— Suresh Kannan R (@imsureshkannanr) June 17, 2024
Reinforced Oversight for Crypto Listings
Under the forthcoming legislation, every listed cryptocurrency will be meticulously evaluated to confirm its adherence to new regulatory expectations. South Korea’s financial authorities have tasked nearly three dozen registered exchanges, including prominent platforms like Upbit and Bithumb, with establishing review committees. These committees are crucial in assessing the reliability of each token’s issuing entity, the effectiveness of user protection measures, and the technological and security standards in place.
Systematic Evaluation and Continuous Compliance
Initially, each cryptocurrency will face a comprehensive review to decide if it qualifies for continued listing. Subsequent reviews will occur quarterly, with the potential for delisting if a token fails to meet the required standards. An official from the financial authority underscored the necessity of these reviews, stating, “Transaction support for assets failing to meet criteria will inevitably be suspended.”
Moreover, the new rules extend beyond simple compliance checks. Factors like the issuer’s reputation, transparency in information disclosure, and market capitalization also play significant roles in the evaluation process. Additionally, tokens with a stable trading history in well-regulated international markets may experience a less stringent review.
New Best Practices and Security Protocols
In a bid to bolster the integrity of cryptocurrency trading, South Korea has also introduced a best practice plan for virtual asset transaction support. This plan enhances existing review mechanisms and establishes uniform standards that all cryptocurrencies must meet before listing.
The new regulations are particularly strict regarding technical security. Cryptocurrencies are required to maintain a clean security record, free from past hacking incidents. They must also fully disclose their smart contract source codes.
Authorities have developed a new screening method to address the challenges associated with tokens from decentralized autonomous organizations (DAOs). This alternative approach specifically targets the unique issues these tokens present. This method eases the stringent screening process for such assets, provided they have traded normally in significant overseas markets for over two years.
Also Read: South Korean Bank Worker Steals $7.5 Million To Invest In Crypto
South Korea Launches $14.5M Blockchain Initiative for 2024
Moreover, today, South Korea’s Ministry of Science and Information and Communication Technology, in collaboration with the Korea Internet & Security Agency, has announced a significant funding initiative for 2024. This $14.5 million program aims to propel the growth of blockchain technology across the nation. Distinctively, the funding segments into two primary areas: the public and private sectors.
The initiative seeks to uncover new public services that could benefit from blockchain integration in the public sector. Conversely, the private sector component bolsters the development of blockchain-centric companies, nurturing innovation and technological advancement.
Several intriguing projects have already been outlined under this initiative. These include the implementation of digital vouchers tied to a central bank digital currency (CBDC), platforms for conducting online referendums, services for certifying the remaining life of batteries, and systems for issuing digital badges.
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Disclaimer: Cryptocurrency is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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