The Digital Asset Exchange Association (DAXA) and about 20 domestic exchanges have established a new code of conduct for crypto companies across the South Korean market.
South Korean crypto exchanges are pushing back on the idea that new rules to protect investors may quickly choke some of the nation’s hallmark speculative trading in smaller tokens https://t.co/2ZllnrjTkY
— Bloomberg Crypto (@crypto) July 2, 2024
DAXA announced in a press release that the new self-regulation standards will be implemented on July 19. A regulatory framework will also be enacted on the same day, including laws to protect cryptocurrency investors in the country.
The press release stated: “If a new cryptocurrency is listed in the future, exchanges must evaluate the token based on form and quality standards.”
Regarding form, the new regulations set standards for the issuer’s reputation, investor protection measures, security, and legal compliance. They emphasized that these are non-negotiable standards, meaning a token will not be listed if it fails to meet these criteria.
“Qualitative requirements aim to review and check the project based on various factors comprehensively.”
Token evaluations are scheduled to be conducted quarterly.
The new standards also require exchanges to establish an independent decision-making body for token listings and to carry out all listing and delisting decisions according to the latest code of conduct. The decision-making process must be recorded and stored for 15 years to enhance fairness and transparency.
Tokens already listed on the exchange must also be re-evaluated according to the new regulations. By the end of 2023, were 1,333 tokens traded in South Korea, all of which must be reassessed within six months.
However, DAXA was reassured that there would be no mass delisting of Altcoins after the evaluation, as exchanges have already strictly adhered to these new regulations.
In most crypto surveys, South Korea is consistently one of the largest markets globally, known for its diverse range of Altcoins. As reported by CoinMinutes, the Korean Won was the most traded fiat currency for crypto in the first quarter of 2024.
According to The Block, Upbit, South Korea’s largest exchange, handled over $30 billion in crypto transactions in June.
In June 2023, South Korea passed the Digital Asset User Protection Act, which integrates 19 crypto-related bills. The law aims to eliminate illegal activities in the market, such as using undisclosed information for crypto speculation, price manipulation, or fraudulent trading.
This law also requires crypto service providers to protect over 80% of their customers’ deposits in cold storage and participate in insurance programs to compensate users in case of risks.
