South Korea Tightens Grip- Introduces New Crypto Listing Rules for Exchanges

South Korea, a country presently known for its active cryptocurrency market, is implementing stricter regulations for listing digital assets on centralized exchanges (CEXs). These new guidelines aim to enhance user protection and promote a more secure crypto environment. Here is a closer look at what the new rules entail and their likely implications.

What is Changing?

Here is a quick breakdown of the key points in the upcoming regulations:

Hacked Assets Need Explanation

Cryptocurrencies associated with past hacking incidents will be barred from domestic exchanges unless the cause is thoroughly investigated and a clear explanation is provided. Additionally, the project must demonstrate how any damages were addressed.

Foreign Assets Require Tailored Information

For foreign digital assets to be listed on Korean exchanges, a white paper or technical manual specifically translated and targeted for the Korean market will be compulsory. This ensures that Korean investors have access to all relevant information in their native language.

Exchanges Face Delisting Power

The new guidelines also empower exchanges to delist any cryptocurrency whose issuer fails to meet disclosure requirements. This ideally includes discrepancies between the actual number of tokens in circulation and the officially reported amount.

 

Exemptions for Established Tokens

Similarly, tokens that have been listed on reputable exchanges outside of Korea for at least two years may be exempt from some of these new requirements. This rule is intended to streamline the process for well-established projects that are entering the Korean market.

Timeline and Reasoning for Regulations and Guidelines

The Financial Supervisory Service (FSS) of South Korea has been collaborating with the Digital Asset Exchange Association (DAXA) since late 2023 to develop these listing guidelines. The official implementation date is yet to be confirmed, but local news reports suggest it could be as early as the end of April or early May 2024.

This move by South Korean authorities is most likely a response to several high-profile hacking incidents that have been targeting cryptocurrency projects in the latter half of 2023. These incidents eroded investor confidence and highlighted the need for stricter regulations.

South Korea’s recent update to the Virtual Asset Users Protection Act, which introduced harsher penalties for crypto-related crimes, further validates the government’s commitment to creating a safe and transparent cryptocurrency ecosystem.

Likely Impact

The new listing rules are expected to have a significant impact on the Korean crypto market:

  • Improved User Protection—These guidelines aim to minimize investor risks associated with potentially fraudulent or insecure projects by requiring stricter disclosure and project vetting.
  • Enhanced Market Stability– Exchanges delisting non-compliant assets could lead to a more stable market environment with established and reliable projects dominating the listings.
  • Likely Hurdles for New Projects- Foreign projects, particularly those without established track records, may face challenges in meeting the new listing requirements.

Overall, South Korea’s stricter crypto listing rules represent a significant step towards a more regulated and user-friendly cryptocurrency environment. While some hurdles may appear for new projects, the long-term benefits for investor protection and market stability are undisputable and outweigh the challenges.

 

https://cointelegraph.com/news/south-korea-tougher-rules-crypto-exchange-listings

https://dailycoin.com/south-korea-mulls-crypto-listing-guidelines-targeting-cexs/



Jimi Pen

Jimi pen is a freelance journalist and Cryptocurrency expert who has completed her education from Vanier College, Quebec. She is originally from Switzerland and loves to travel in her free time. She has been associated with the cryptocurrency market since 4 years.

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