South Korea’s cryptocurrency market is facing a wave of sweeping regulation. Starting in July, about 600 crypto assets will be evaluated based on new standards, and those that don’t meet them could be delisted. Here are the details…
Key Developments in Cryptocurrency in South Korea
According to local news reports, as the New Crypto Asset User Protection Law takes effect on July 19, the financial regulator will announce a best practice plan for crypto asset trading support. This means that cryptocurrency exchanges such as Upbit, Bithumb, Coinone, Korbit, and Gopax must conduct a preliminary review and determine which assets will continue to be listed. A financial authority official said: We will allow crypto asset exchanges to evaluate whether to continue to maintain trading support for traded crypto asset projects for six months. After that, quarterly maintenance inspections will be carried out. Trading support for crypto asset projects that do not meet the trading support standards will inevitably be suspended.
South Korea’s latest move comes after some global exchanges, such as Crypto.com and Binance, faced regulatory hurdles in gaining a foothold in the country. Critics argue that the financial authorities’ “crypto segregation” has helped domestic exchanges form a monopoly and prevented users from trading at lower fees. According to CoinGecko analysis, the leading domestic exchange, Dunamu, has a 65% market share. The second-largest exchange, Bithumb, has a share of nearly 30%. This regulatory change could reshape South Korea’s cryptocurrency market, affecting the fate of domestic exchanges and countless crypto assets.
29 exchanges will start the review process
As a result, the Financial Services Commission (FHK), a South Korean regulator, has issued notices to 29 registered cryptocurrency exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, requiring them to regularly evaluate whether they should continue to maintain listed tokens and trading support. According to The Korea Times, South Korea is preparing to implement a crypto asset user protection law that will take effect on July 19.
The new law stipulates that violators will face heavy penalties and fines. The maximum sentence is more than one year in prison, or a fine of three to five times the illegal gains. Under the new law, all 29 registered cryptocurrency exchanges must review the 600 cryptocurrencies they list.
