Commencing July 19, South Korea will conduct a reevaluation of 600 cryptocurrencies.
The financial regulators in South Korea want to reevaluate the inclusion of some 600 cryptocurrencies listed on local exchanges.
The purpose of this rigorous evaluation is to guarantee adherence to the new regulations contained in the Virtual Asset User Protection Act, which became effective on July 19.
The South Korean government has recently finalized a best practice plan for the support of virtual asset transactions, according to local media. This strategy establishes stringent new standards for the listing of cryptocurrencies on domestic exchanges. The authorities will implement a more rigorous review procedure to supplement the current system, which currently involves exchanges conducting their own internal evaluations.
Listing vetting is the primary objective of the new regulations. Currently, exchanges evaluate and list cryptocurrencies on an individual basis. Nevertheless, authorities will establish standards that all specified cryptocurrencies must satisfy by implementing the best practice plan.
According to an official from the financial authority, exchanges would evaluate whether to continue providing transaction support for each virtual asset every six months. The subsequent evaluations would take place every three months.
“It is unavoidable that transaction support will be suspended for virtual asset products that do not satisfy the standards for maintaining transaction support,” the official continued.
Discussions are currently underway regarding nine critical screening prerequisites. These include determining the suitability of the cryptocurrency format for listing, evaluating the reliability of the issuer, ensuring the presence of user protection mechanisms, assessing the security levels of technology, and validating compliance with domestic laws and regulations.
In order to evaluate the reliability of cryptocurrency issuers, South Korean authorities will examine their information disclosure practices and corroborate the cryptocurrency’s circulation. In order to safeguard users, authorities will verify whether an on-chain explorer is capable of monitoring blockchain activity and white papers.
Cryptocurrencies must disclose their smart contract source codes and have no history of hijacking incidents in terms of technical security. Furthermore, coins and tokens that violate current laws, coins and tokens that conceal transaction history, and coins and tokens issued directly by exchanges will be ineligible for listing.
Qualitative screening requirements are also being considered by the authorities. In addition to multiple-choice questions, these inquiries encompass subjective and descriptive inquiries.
The assets’ listing status cannot be guaranteed by satisfying the formal requirements alone. Additionally, issuers are required to exhibit a credible business history, a reasonable issuance and circulation plan, and comprehensive disclosure.
Authorities in South Korea may still challenge the listing of a cryptocurrency despite the fact that it satisfies all formal requirements, based on qualitative criteria. Nevertheless, there are exceptions for assets that have been traded without incident on well-regulated overseas exchanges for more than two years.
Upbit is one of the 29 domestic crypto exchanges in South Korea. The transaction volume of Upbit is the 13th highest in the world, as per CoinGecko data.
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