Key Points
- South Korea is set to implement strict guidelines for cryptocurrency exchange listings in May.
- The new rules aim to increase transparency and security in the digital asset market, with a focus on investor protection and market integrity.
South Korea is preparing to introduce rigorous guidelines for cryptocurrency exchange listings. Local media outlet News1 has reported that this move is part of the country’s strategy to improve transparency and security in its rapidly expanding digital asset market.
The forthcoming guidelines, led by South Korean financial authorities, are intended to strengthen investor protection and uphold market integrity. These rules are expected to be released by the end of April or early May. Upon implementation, both domestic and foreign cryptocurrency exchanges will be required to adhere to these guidelines.
New Rules for Crypto Exchanges
Under the new regulations, South Korean-based cryptocurrency exchanges will be prohibited from listing tokens associated with projects that have been exploited in the past, unless thorough investigations into the root causes and security resolutions have been completed.
The guidelines also propose strict criteria for foreign crypto projects seeking listings on South Korean exchanges. The law mandates that these projects publish detailed whitepapers or technical manuals specifically tailored for the South Korean market before they can be accepted for trading on the exchanges.
However, exemptions may be granted to tokens that have been traded on licensed exchanges for over two years, exempting them from meeting the new strict criteria.
Authorities Can Order Delisting of Certain Cryptocurrencies
The report also revealed that under the new guidelines, authorities may decide to order exchanges to delist certain cryptocurrencies from their platforms if the token issuer fails to provide comprehensive information regarding the digital asset.
Moreover, the law permits the authorities to hold crypto exchanges responsible for ensuring accurate disclosure of essential information by token issuers. Failure to provide comprehensive information, including discrepancies between actual circulation figures and publicly disclosed amounts, may result in the tokens’ delisting from exchanges.
South Korean financial authorities are currently soliciting feedback from local exchanges to shape the new guidelines. Collaborative efforts between the country’s Financial Supervisory Services and stakeholders like the Digital Asset Exchange Association have been instrumental in refining the listing guidelines and fostering a robust regulatory framework.
South Korea has one of the busiest crypto markets in the Asia Pacific region. Upbit, the largest digital asset trading platform, recorded a 24-hour trading volume of $15 billion on March 5, 2024. In July 2023, the company surpassed Coinbase and OKX in trading volume. The exchange experienced a 42.3% increase in spot trading, reaching a record high of $29.8 billion, while Coinbase and OKX saw their volumes decline by 11.6% and 5.75%, landing at $28.6 billion and $29.0 billion, respectively.
