Recently, South Korea’s Financial Supervisory Service (FSS) made headlines regarding the rumored removal of multiple digital assets from local crypto exchanges. The FSS clarified its role in this matter, stating that it had instructed registered exchanges like Upbit, Bithumb, and Gopax to assess various tokens on their platforms. This directive is in alignment with the Virtual Asset User Protection Act, which requires strict compliance and regular evaluations of listed tokens.
Under the new law, exchanges are mandated to adhere to stricter guidelines for token listings and conduct biannual reassessments of existing tokens. The evaluation process focuses on factors such as the reliability of the issuing entity, user protection measures, technology, security standards, and regulatory compliance of digital assets. Non-compliance with these regulations can result in severe penalties, including jail terms and substantial fines.
The possibility of as many as 600 altcoins facing delisting during these reviews has sparked concerns among investors, leading to fears of mass panic selling. However, the FSS has denied direct involvement in the listing or delisting of virtual assets on exchanges. The regulator clarified that its role is limited to establishing listing standards rather than overseeing the review process. The FSS stated that financial authorities inspect virtual asset operators but do not directly review stocks, emphasizing that announcements regarding listing decisions will be made by the exchanges and DAXA.
Furthermore, reports suggest that the FSS is contemplating the establishment of a new division dedicated to crypto regulation. This division would be tasked with policy development, regulatory oversight, and the creation of a framework for the rapidly growing cryptocurrency sector. This move indicates the FSS’s commitment to enhancing regulatory measures and ensuring the stability and transparency of the cryptocurrency market in South Korea.
The FSS’s recent actions and statements have underscored the importance of regulatory compliance in the cryptocurrency industry. While investor concerns over potential delistings persist, the FSS’s efforts to strengthen oversight and create a specialized division for crypto regulation reflect a proactive approach to addressing the challenges and opportunities presented by digital assets. As the regulatory landscape continues to evolve, collaboration between financial authorities, exchanges, and industry stakeholders will be crucial in shaping a secure and sustainable environment for cryptocurrency trading in South Korea.
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