South Korea will implement its first crypto user protection law on July 19. As a result, the South Korean financial authority has notified nearly 30 registered exchanges to review the more than 600 cryptocurrencies they list there. Under the new law, businesses that fail to comply face heavy criminal penalties.
Crypto exchanges are required to review the list of assets
The Korea Times reported on Sunday that registered exchanges must thoroughly review the listing status of their listed crypto assets. Hundreds of cryptocurrencies are currently traded on the 29 exchanges operating in South Korea.
Figures from the Korean Financial Intelligence Unit (FIU) showed that more than 600 tokens were listed on crypto exchanges in South Korea during the second half of 2023. FIU A report from the Financial Services Commission (FSC) highlighted that this figure represented a drop of 3.5% compared to the first half of 2023.
The Financial Supervisory Service (FSS) has revealed that all exchanges registered with the financial regulator must assess whether their listed cryptocurrencies meet the watchdog’s criteria.
A financial authority official said exchanges are required 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 crypto asset under review.
Statement from an FSS officer about the new requirement. Source: The Korea Times
Within the framework of the new law, discussions are necessary to create an evaluation and decision-making service within each company. The department must assess the reliability of token issuers.
In addition, they must determine whether transmitters comply with user protection measures, technology and security standards as well as their regulatory compliance. Tokens that do not meet the required criteria will be labeled as “caveat” assets and will be delisted.
According to the report, alternative criteria will be specified in the case of cryptocurrencies like Bitcoin, in which “the issuer is not specified”.
South Korean authorities prepare to adopt new legislation
In February, South Korean financial authorities announced that their Virtual Asset User Protection Law would come into effect on July 19. Korea’s first crypto law aims to protect user assets and prevent “unfair business practices” in the country. Additionally, the new law aims to grant financial regulators the power to supervise the sector.
As reported According to Bitcoinist, crypto companies must ensure user security and protect their funds. Violation of the new legislation could result in criminal prosecution or fines for economic operators. Virtual asset companies could be fined three to five times the unfair profit, while criminal charges could result in up to a year in prison.
According to the Korea Times report, financial authorities are “preparing a change in their internal structures to develop policies on the crypto industry.” The FSS is preparing to oversee and investigate unfair trading of virtual assets in its two new offices.
Likewise, the FSC plans to create a new office at the end of the month. The office will exclusively oversee the regulation of the virtual assets sector frame.
Bitcoin (BTC) is trading at $66,330 in the three-day chart. Source: BTCUSDT on TradingView
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