South Korea’s cryptocurrency industry is set to undergo a significant shakeup as major exchanges and their trade association, the Digital Asset Exchange Association (DAXA), announce plans to reevaluate over 1,300 cryptocurrencies currently traded on domestic platforms. This move comes in line with newly established self-regulatory standards that will be implemented on July 19, the same day the country’s inaugural regulatory framework on crypto investor protection takes effect.
New Self-Regulatory Standards Unveiled
The 20 crypto exchanges in South Korea, along with DAXA, have jointly established a new code of conduct for local cryptocurrency firms. The updated standards will require exchanges to closely examine both the formal and qualitative aspects of cryptocurrencies before listing them for trading.
“If in the future a new cryptocurrency is to be listed, the exchange will need to examine the token on both formal and qualitative requirements,” the release stated.
The formal requirements cover areas such as issuers’ credibility, investor protection measures, security, and compliance. Cryptocurrencies that do not meet any one of these criteria will not be eligible for listing.
The qualitative review, on the other hand, will take a comprehensive look at various factors surrounding the project. Furthermore, the new rules mandate local exchanges to set up an independent decision-making body for token listings and document the process for increased transparency.
Reevaluation of Existing Cryptocurrencies
In addition to vetting new listings, the industry alliance will also reevaluate the over 1,300 cryptocurrencies that are currently being traded on South Korean exchanges. This exercise will take place within a six-month grace period, but DAXA believes it is unlikely to result in mass delistings, as major platforms have already been adhering to the new requirements.
South Korea is home to one of the largest cryptocurrency markets globally, and it is known for its altcoin-heavy trading landscape. The country’s inaugural crypto law, the Virtual Asset User Protection Act, aims to address illicit activities in the market and strengthen user fund protection measures.
As the industry prepares for the implementation of these new standards, the reevaluation of over 1,300 cryptocurrencies is set to reshape the South Korean crypto landscape, potentially leading to a more stringent and regulated ecosystem.
