A consortium of 20 South Korean cryptocurrency exchanges has addressed concerns regarding the new regulatory framework for crypto assets, assuring investors that mass delistings of tokens are unlikely. The Digital Asset Exchange Alliance (DAXA) declared on July 2 that a comprehensive review of 1,333 cryptocurrencies will be conducted over the next six months under the new crypto user protection laws, which aim to safeguard investors.
Why Did South Korean Exchanges Act Swiftly?
Following the announcement, major South Korean exchanges such as Bithumb and Upbit, among others, will scrutinize the cryptocurrencies listed on their platforms. This initiative is in line with the new investor protection laws set to come into effect on July 19. DAXA mentioned that new token listings would undergo evaluation based on the Crypto Asset User Protection Act, and it has developed a best practices guide to aid 20 exchanges in reviewing and potentially delisting cryptocurrencies.
The guidelines laid out by DAXA will assess token-issuing organizations on criteria such as reliability, user protection, and regulatory compliance, providing a structured approach to evaluating digital assets.
What is South Korea’s Role in the Crypto Market?
DAXA also highlighted that cryptocurrencies traded in well-regulated overseas markets for over two years could undergo a more lenient screening process. The organization is working with exchanges to compile a list of reputable overseas markets, potentially including those governed by the International Organization of Securities Commissions (IOSCO).
South Korea has become a pivotal player in the global cryptocurrency market. In the first quarter of the year, the South Korean won was the most traded fiat currency pair, accounting for $456 billion in exchange volume, surpassing the US dollar’s $455 billion. Currently, Upbit, South Korea’s largest exchange, ranks among the top 20 exchanges globally, with a daily trading volume of $889.3 million, according to CoinGecko.
Key Takeaways for Investors
• Token evaluations will consider reliability, user protection, and compliance.
• Cryptocurrencies listed for over two years in regulated markets will face easier scrutiny.
• DAXA offers a structured guide to help exchanges review and possibly delist tokens.
These measures are designed to enhance transparency and security for South Korean crypto investors, reducing the risk of abrupt token delistings and fostering a more stable market environment.