Regulation
South Korea set to implement delisting of cryptocurrencies under new regulations
South Korea’s financial watchdog has announced an upcoming regulation requiring the delisting of several cryptocurrencies. The move, which is expected to come into force in July with the Virtual Asset User Protection Act, is part of a broader strategy to secure the cryptocurrency market and ensure strong consumer protection against potential risks.
New regulatory framework to streamline crypto delistings in South Korea
In a recent report from CoinGap, South Korean financial regulators are working to develop methods to disrupt trading in currently listed cryptocurrencies. The impending “Virtual Asset User Protection Act Compliance Best Practices” will delist many cryptocurrencies. Regulators said the cryptocurrency rule would be released in early June.
A source from South Korea’s financial watchdog revealed on May 10 that future rules will include criteria for listing virtual assets. Additionally, the rule will consist of guidelines for the decision-making process governing continued trading for previously listed virtual assets. Additionally, they said the goal was to create a framework to delist individual virtual asset issuers if something goes wrong.
Guidelines will be provided in late May and early June. South Korea’s Financial Supervisory Service is currently creating rules to enable self-regulation between cryptocurrency exchanges before implementing the Virtual Asset User Protection Act in July. Standards for the volume of virtual assets issued, distribution volume and transaction support will be essential.
Additionally, it will explore measures such as banning the listing of virtual assets with a history of hacking. Additionally, the regulations will require Korean white papers and technical guides for overseas virtual assets.
Currently, the law on the protection of users of virtual assets is in its early stages. Consequently, an official from the Financial Surveillance Service highlighted the constraints inherent in the supervision of issuers and distributors of virtual assets. “The law on the protection of users of virtual assets is still in its first stage, so there will necessarily be limits in the regulation of issuers and distributors of virtual assets,” he said: according to to the Korean Economic Daily.
South Korea strengthens crypto regulation amid calls for effective autonomy
To remedy this gap South Korea, attempts are made to adopt self-regulatory mechanisms such as best practices and recommendations. The Financial Supervisory Service’s intention to implement such best practices stems from criticism of the effectiveness of the Digital Asset Exchange Alliance’s (DAXA) standard listing criteria published last year.
“DAXA has guidelines for designating prudential stocks and delisting them, but it consistently adopts a laissez-faire attitude, even if major exchanges do not follow them,” said Min Byeong-Seok, a member of the Democratic Party of Korea . In response, Min Byeong-Seok denounced the neutralization of self-regulation. He said: “This has been neutralized and self-regulation no longer makes sense. »
At the same time, DAXA has clarified that its member companies are not subject to its requirements. It also emphasized the autonomous process of evaluation and decision-making regarding transaction support elements of member companies.
“When an issue is identified with a transactional support item from a member firm, it is reviewed in accordance with the procedures, but the review process and decisions are made by each member firm,” said a DAXA representative .
In addition, the expected effect of the future announcement of best practices for listing virtual assets is the development of listing policies by domestic virtual asset exchanges. The reason for this potential is that the guidelines are authoritative, unlike advisory committees like DAXA, which are voluntary.
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