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South Korea is set to review the listings of over 600 tokens on domestic crypto exchanges next month under new regulatory measures. The financial authorities will begin re-evaluating these cryptocurrency listings on domestic trading platforms starting in July, following the implementation of the Virtual Asset User Protection Act.
The Korean financial regulators are finalizing practices for crypto listings, which will be enforced starting July 19 under the new law. These regulations will apply to nearly three dozen registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. These exchanges will conduct initial reviews to determine whether to maintain or delist each token.
New Regulatory Framework
Under the new regulatory framework, crypto exchanges must establish a review committee to evaluate various factors such as the reliability of the issuing entity, user protection measures, technology and security standards, as well as regulatory compliance.
Additional criteria include the issuer’s capabilities and reputation, past business history, information disclosure, operational transparency, total supply and circulation, market capitalization, and potential conflicts of interest between a trading platform and token holders.
Tokens issued by decentralized autonomous organizations (DAOs) may not meet standard requirements.
However, tokens that have been traded normally for over two years in regulated markets such as the U.S., U.K., France, Germany, Japan, Hong Kong, Singapore, India, and Australia will be subject to a less strict review process. Additionally, crypto exchanges will be banned from accepting any payments in return for listing a token.
Ongoing Reviews and Assessments
Subsequent reviews will occur quarterly. Tokens deemed “problematic” will be designated as cautionary and potentially delisted. Crypto exchanges will have a six-month period to assess whether to continue supporting existing crypto listings, followed by maintenance reviews every three months.
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