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Starting July 19, a new South Korean law mandates that crypto exchanges conduct regular reviews of token listings, aiming to enhance user protection.
South Korea's FSC Enforces New Law, Mandating Biannual Reviews for Crypto Exchanges to Ensure Token Compliance
In a recent report by Cointelegraph, the Financial Service Commission (FSC), South Korea's financial regulator, has proactively implemented the new law. It has notified 29 registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, to periodically assess the tokens listed on their platforms and determine whether to continue supporting their trading.
A report in The Korea Times indicates that South Korea will enforce a law to safeguard virtual asset users by July 19.
Violations of the new law carry significant consequences. Offenders may face substantial criminal penalties and fines, including a fine of three to five times the number of unlawful profits or a fixed-term jail sentence of more than one year. The new law mandates that all 29 registered crypto exchanges evaluate the more than 600 tokens listed.
The law would mandate that crypto exchanges adhere to more stringent review guidelines for token listings and conduct biannual reviews of existing listed tokens to ensure they comply with the new standards. Exchanges are required to perform maintenance evaluations every three months following the initial review.
The South Korean government released a new Virtual Asset Users Protection Act amendment in early February. In April, the FSC suggested that there may be more stringent regulatory requirements for listing new tokens on crypto exchanges.
At that time, the commission had proposed several measures to enhance market supervision and security, including prohibiting token listings from compromised projects. The new standards may prevent tokens generated by projects with unresolved security issues and security vulnerabilities from being listed on local exchanges.
FSC to Implement New Regulatory Guidelines and Establish Bureau for Crypto Oversight
The report also indicates that the FSC is developing new regulatory guidelines for crypto transactions on exchanges, which could be implemented by July in conjunction with the user protection law.
Authorities are also modifying their organizational structures to establish more effective policies for the cryptocurrency sector. The FSC plans to establish a new bureau to oversee the industry's regulatory framework and concentrate on virtual assets. A proposition for the same will be introduced on June 17 and reviewed by June 18.
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