Coin Edition -
- South Korea’s new law threatens hundreds of cryptocurrencies with delisting.
- Exchanges must evaluate assets for reliability, security, and compliance.
- Regulatory crackdown may impact domestic exchanges and global markets.
South Korea’s cryptocurrency market faces a sweeping regulatory crackdown. Starting in July, approximately 600 virtual assets will be evaluated against new standards, with those failing to comply facing potential delisting.
According to local news sources, financial regulators will detail best practice plans for virtual asset transaction support alongside the implementation of the new Virtual Asset User Protection Act on July 19th. This means crypto exchanges like Upbit, Bithumb, Coinone, Korbit, and Gopax must conduct initial reviews and determine which assets remain listed.
An official from the financial authorities stated:
“We will allow virtual asset exchanges to review whether to maintain trading support for virtual asset items that have been trading for six months. Afterward, maintenance reviews will be conducted once every three months. Transaction support will inevitably be suspended for virtual asset items that do not meet the standards for maintaining transaction support.”
The authorities also laid down the parameters in the review process. Exchanges will evaluate the reliability of issuing entities, user protection measures, tech security, legal compliance, and more. Items that don’t meet the requirements will face suspension of trading support.
However, there’s an alternative screening method for assets like Bitcoin and DAO-issued coins that might not meet typical criteria. Digital assets traded on well-regulated overseas markets for over two years might receive some leeway.
South Korea’s latest move comes after several global overseas exchanges like Crypto.com and Binance have faced regulatory hurdles in gaining a strong foothold in the nation. Critics have argued that the financial authorities’ ‘crypto isolationism’ is helping domestic exchanges to monopolize and prevent users from trading at lower fees. According to CoinGecko’s analysis, leading domestic exchange Dunamu holds a 65% market share. The second-largest exchange, Bithumb, maintains nearly 30%.
This regulatory shakeup could reshape South Korea’s cryptocurrency landscape, impacting both domestic exchanges and the fate of numerous virtual assets.
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