The collapse of the $60 billion Terra ecosystem sent shockwaves across the entire crypto industry, which has been declining since the year started. A few of South Korea’s top crypto exchanges are now joining hands to make sure that such type of token collapse won’t repeat in the future.
Upbit, Bithumb, Coinone, Korbit, and Gopax, South Korea’s top five crypto exchanges, plan to create a consultative body whose goal is to prevent the recurrence of a token collapse similar to the crash of the $60 billion Terra ecosystem, local media Yonhap News reported. The organization plans to achieve its goal by improving the regulatory standards in the space and creating a channel of communication where affected investors and companies can air their concerns.
The decision by the five crypto exchanges comes a few weeks after they were criticized for their seeming indifference to the collapse of the UST stablecoin and LUNA crypto, which might have added confusion among affected investors. The exchanges announced their plan at the party-government meeting held at the National Assembly on June 13.
Members of the consultative body will be composed of the CEOs of the five exchanges and related working groups. The organization will be divided into three areas such as transaction support, market monitoring, and compliance monitoring.
The body plans to introduce a virtual currency warning system and delisting standards by September this year. Companies will be required to provide information on cryptos such as evaluation reports and white papers.
By October, the organization expects to come up with guidelines for listing screening as well as a policy to periodically evaluate potential risks related to cryptos. The new listing guidelines will include evaluation for any signs of a Ponzi scheme.
By January next year, the consultative body will impose a new requirement for new investors. First time cryto investors will be required to complete an educational video before they are allowed to invest in digital currencies.