Recently, the Financial Supervisory Service (FSS) in South Korea addressed concerns surrounding the potential removal of various digital assets from local crypto exchanges. Reports had surfaced claiming that the FSS had instructed registered exchanges, like Upbit, Bithumb, and Gopax, to assess multiple tokens on their platforms in accordance with the Virtual Asset User Protection Act.
This directive under the new legislation requires exchanges to adhere to stricter guidelines for token listings and conduct biannual reassessments of existing tokens. Part of the evaluation process involves assessing the reliability of the issuing entity, user protection measures, technology, security standards, and regulatory compliance for each digital asset. Non-compliance with these regulations can result in severe penalties, such as a minimum one-year jail term or fines equivalent to three to five times the illegal profits obtained from the endeavor.
As a result of these regulatory measures, there is speculation that up to 600 altcoins could potentially face delisting during the assessment reviews. This has led to fears of widespread panic selling among investors. In response to these rumors, the FSS has refuted claims of directly influencing the listing or delisting of virtual assets on exchanges. The regulator clarified that its role is primarily focused on establishing listing standards rather than overseeing the review process directly.
Additionally, reports suggest that the FSS is considering the creation of a dedicated division specifically tasked with regulating the crypto industry. This division would play a crucial role in policy development, regulatory oversight, and the establishment of a comprehensive framework for the expanding cryptocurrency sector in South Korea.
The FSS’s clarification on its role in crypto regulation provides insights into the evolving landscape of digital asset oversight in South Korea. The stringent compliance mandates and potential establishment of a separate division for crypto regulation signal a growing emphasis on maintaining regulatory standards and investor protection within the cryptocurrency market. As the sector continues to mature, clear guidelines and regulatory frameworks will be essential in fostering a safe and secure environment for both market participants and consumers.
