On July 19, South Korea will enforce its inaugural crypto act regarding user protection. Consequently, the South Korean financial authority has issued notifications to nearly 30 registered exchanges, requesting that they evaluate the more than 600 cryptocurrencies they have listed.
On Sunday, The Korea Times reported that registered exchanges are required to conduct a thorough assessment of the listing status of their crypto assets. Currently, the 29 exchanges in South Korea are trading hundreds of cryptocurrencies.
South Korea’s crypto exchanges listed more than 600 tokens during the latter half of 2023, according to the Korean Financial Intelligence Unit (FIU). According to the Financial Services Commission (FSC) report, the FIU reported that this figure represented a 3.5% decrease from the first half of 2023.
The Financial Supervisory Service (FSS) has disclosed that all exchanges that are registered with the financial regulator are required to evaluate whether the cryptocurrencies they list satisfy the watchdog’s criteria.
An officer from the financial authorities stated that exchanges are required to conduct “maintenance evaluations” every three months and examine their listed tokens every six months. The platforms, which include Upbit, Bithumb, Coinine, and Korbit, must determine whether they will continue to facilitate the trading of the reviewed crypto asset during this procedure.
The new law necessitates the establishment of an evaluation and decision-making department within each company through exchanges. The department is required to assess the credibility of the token issuers.
Furthermore, they must ascertain whether issuers adhere to regulatory compliance, technology, and security standards, as well as user protection measures. The tokens that do not satisfy the necessary criteria will be classified as “cautionary” assets and may be delisted.
The report specifies that alternative criteria will be established for cryptocurrencies such as Bitcoin, in which “the issuer is not specified.”
South Korean financial authorities declared in February that the adoption of their Virtual Asset User Protection Act would occur on July 19. The primary objective of Korea’s inaugural Crypto Act is to safeguard the assets of users and prevent “unfair trading practices” within the nation. Furthermore, the new legislation aims to empower financial regulators to oversee the industry.
Crypto businesses are required to guarantee the safety of their consumers and protect their funds, as Bitcoinist has reported. Business operators may incur criminal charges or penalties for violating the new legislation. Virtual asset companies may be subject to a sanction that is three to five times the amount of the unjust profit, and criminal allegations may result in a one-year prison sentence.
The financial authorities are “preparing a change in their internal structures to devise policies for the crypto industry,” according to The Korea Times. The FSS is in the process of establishing two new bureaus to oversee and investigate discriminatory virtual asset trading.
In the same vein, the FSC intends to establish a new bureau by the end of the month. It will be the sole responsibility of the office to supervise the regulatory framework of the virtual asset industry.
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