The South Korean government is about to roll out new guidelines to impose stricter regulation for token listings on centralized crypto exchanges (CEXs) as soon as next month.
According to reports from local media outlet News1, the move is part of the country’s efforts to enhance transparency and security within its rapidly growing digital asset market.
The upcoming guidelines, spearheaded by South Korean financial authorities, aim to fortify investor protection and uphold market integrity. The rules are slated for release by the end of April or early May. Once implemented, crypto exchanges within and outside the country will be obligated to comply with the guidelines.
Under the new rules, South Korean-based crypto exchanges are restricted from listing tokens associated with projects that have been exploited in the past unless thorough investigations into the root causes and security resolutions are completed.
The guidelines also propose stringent criteria for foreign crypto projects seeking listings on South Korean exchanges.
According to the report, the law demands that these projects publish detailed whitepapers or technical manuals explicitly tailored for the South Korean market before being accepted to trade in the exchanges.
However, exemptions may apply to tokens traded on licensed exchanges for over two years, sparing them from meeting the new stringent criteria.
Authorities Can Order Exchanges to Delist Certain Cryptocurrencies
The report also disclosed 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.
Furthermore, the law allows the authorities to hold crypto exchanges accountable 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 seeking feedback from local exchanges to shape the new guidelines.
As per the report, 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.
Meanwhile, South Korea has one of the busiest crypto markets in the Asia Pacific region. Upbit, the largest digital asset trading platform and people’s favorite, 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.
