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South Korea’s New Cryptocurrency Law to Review 600 Listed Assets
South Korea will implement its first crypto user protection act on July 19. As a result, the South Korean financial regulator notified nearly 30 registered exchanges to review the more than 600 cryptocurrencies listed on them. Under the new law, companies that fail to comply could be subject to severe criminal penalties.
Cryptocurrency exchanges needed to review asset list
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.
Data from the Korean Financial Information Unit (FIU) showed that over 600 tokens were listed on cryptocurrency exchanges in South Korea during the second half of 2023. FIU The Financial Services Commission (FSC) report highlighted that this number represents a decline 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 authorities official said exchanges are required to review 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 the exchange of the investigated cryptoasset.
Statement from an FSS officer about the new requirement. Source: The Korea Times
Under the new law, exchanges are needed to create an evaluation and decision-making department within each company. The department must evaluate the reliability of the token issuers.
Additionally, they must determine whether issuers meet user protection measures, technology and security standards, and their regulatory compliance. Tokens that do not meet the required criteria will be labeled as “cautionary” assets and risk delisting.
According to the report, in the case of cryptocurrencies such as Bitcoin, alternative criteria will be specified, in which “the issuer is not specified”.
South Korean authorities prepare for new legislation
In February, South Korean financial authorities announced that their Virtual Asset User Protection Act would take effect on July 19. Korea’s first Crypto Act aims to protect users’ assets and prevent “unfair trade practices” in the country. Additionally, the new law aims to grant financial regulators the power to oversee the industry.
AS reported from Bitcoinist, crypto companies must ensure the safety of users and safeguard their funds. Violation of the new legislation could result in criminal charges or fines for operators in the sector. Virtual asset companies could be fined three to five times the unfair profit, while criminal charges could end in up to a year in prison.
According to the Korea Times report, financial authorities are “preparing a change in their internal structures to craft policies on the cryptocurrency industry.” The FSS is preparing to do so watch over and investigate unfair trading in virtual assets at its two new offices.
Likewise, the FSC plans to establish a new office at the end of the month. The office will exclusively oversee the regulatory framework of the virtual asset industry.
Bitcoin (BTC) is trading at $66,330 in the three-day chart. Source: BTCUSDT on TradingView
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