South Korea will implement its first crypto act on user protection on July 19. As a result, the South Korean financial authorities have notified nearly 30 registered exchanges to review the more than 600 cryptocurrencies they have listed. Under the new law, companies that fail to comply may face severe criminal penalties.
Crypto Exchange Required To Review Asset Listing
The Korea Times reported on Sunday that registered exchanges should completely review the listing status of their listed crypto assets. Hundreds of cryptocurrencies are currently traded on 29 exchanges operating in South Korea.
Statistics 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. The FIU report, under the Financial Services Commission (FSC), emphasized that this number was 3.5% down. compared to the first half of 2023.
The Financial Supervisory Service (FSS) stated that all exchanges registered with the financial regulator must check whether the listed cryptocurrencies meet the watchdog’s criteria.
An official from the financial authority said that exchanges are under an obligation to review their listed tokens every six months and to conduct a “maintenance review” every three months. During this process, platforms, including Upbit, Bithumb, Coinine, and Korbit, must decide if they can continue to support trading of the updated crypto asset.
Statement from an FSS officer about the new requirement. Source: The Korea Times
As part of the new law, exchanges are required to create an evaluation and decision-making department within each company. The department should check the credibility of token issuers.
Additionally, they must determine whether issuers meet user protection measures, technology, and security standards as well as their compliance with the law. Tokens that do not meet the required criteria will be labeled with “warning” properties and defacement.
According to the report, other methods will be specified in the case of cryptocurrencies such as Bitcoin, where “the issuer is not specified.”
South Korean Authorities Prepare for New Law
In February, South Korea’s financial authorities announced that its Virtual Asset User Protection Act will be implemented on July 19. Korea’s first Crypto Act aims to protect users’ assets and prevent “unfair trading practices” in the country. Additionally, the new law aims to give financial regulators the power to regulate the industry.
As reported by Bitcoinist, crypto businesses must ensure the safety of users and protect their funds. Violations of the new law could result in criminal charges or fines for business operators. Virtual goods companies can be fined three to five times the gross profit, while criminal charges can result in up to one year in prison.
According to a report by the Korea Times, the financial authorities are “preparing a change in their internal structures to formulate policies for the crypto industry.” The FSS is preparing to monitor and investigate illegal trading of physical assets in its two new offices.
Similarly, the FSC plans to establish a new office by the end of the month. The office will specifically oversee the regulation of the physical goods industry frame.
Bitcoin (BTC) is trading at $66,330 in the three-day chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, Chart from TradingView.com
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