South Korea will implement its first user protection cryptocurrency law on July 19. As a result, the South Korean financial authority has notified nearly 30 registered exchanges to review more than 600 cryptocurrencies listed on them. Under the new law, companies that do not comply may face severe criminal penalties.
Cryptocurrency exchanges are required to review the asset list
The Korea Times reported on Sunday that registered exchanges should conduct a comprehensive review of the listing status of their listed cryptocurrency assets. Hundreds of cryptocurrencies are currently traded on 29 exchanges operating in South Korea.
Korea's Financial Intelligence Unit (FIU) figures showed that more than 600 tokens were listed on cryptocurrency exchanges in South Korea during the second half of 2023. The report by the Financial Intelligence Unit, which is affiliated with the Financial Services Commission (FSC), highlighted that this number represents a decline By 3.5% compared to the first half of 2023.
The Financial Supervision Service (FSS) has revealed that all exchanges registered with the financial regulator must assess whether cryptocurrencies listed on them meet the watchdog’s standards.
An official from the financial authorities said that exchanges are obliged to review their listed tokens every six months and conduct “maintenance reviews” every three months. During this process, platforms, including Upbit, Bithumb, Coinine and Korbit, must decide whether they can continue to support trading of the reviewed cryptocurrency assets.
Statement from an FSS officer about the new requirement. Source: The Korea Times
As part of the new law, the exchanges are needed to create an evaluation and decision-making department within each company. The department must evaluate the reliability of token issuers.
In addition, they must determine whether issuers meet their user protections, technology, security standards and regulatory compliance. Tokens that do not meet the required criteria will be classified as “warning” assets and face delisting.
According to the report, alternative standards will be defined in the case of cryptocurrencies such as Bitcoin, for which “the issuer has not been identified.”
South Korean authorities are preparing to enact new legislation
In February, South Korean financial authorities announced that its Virtual Asset User Protection Law would be implemented on July 19. Korea's first cryptocurrency law aims to protect user assets and prevent “unfair business practices” in the country. In addition, the new law seeks to give financial regulators the authority to supervise the industry.
According to Bitcoinist, cryptocurrency companies must ensure the safety of users and protect their funds. Violating the new legislation could result in criminal charges or fines being imposed on business operators. Virtual asset companies can be fined three to five times the unfair profit, while criminal charges can result in up to one year in prison.
According to the Korea Times report, financial authorities are “preparing for a change in their internal structures to set policies on the cryptocurrency industry.” The FSS is preparing to supervise and investigate unfair trading of virtual assets in its two new offices.
Likewise, the Financial Services Commission plans to establish a new office at the end of the month. The office will exclusively oversee the regulatory regulation of the virtual assets industry Domain.
Bitcoin (BTC) is trading at $66,330 in the three-day chart. Source: BTCUSDT on TradingView
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