South Korea’s leading cryptocurrency exchanges are taking steps to alleviate concerns that new investor protection regulations will result in the rapid delisting of numerous smaller tokens as noted by Bloomberg. The Digital Asset Exchange Alliance, an industry trade body, announced that platforms will review their listings to ensure compliance with the new legislation set to take effect on July 19.
The comprehensive review will encompass 1,333 coins over the next six months, suggesting that immediate mass delistings are unlikely. The Alliance emphasized that all new token listings will be scrutinized under the Virtual Asset User Protection law once it is enforced.
South Korea has become a player in the global crypto market. At one point this year, the won overtook the dollar as the most-used currency for trading digital assets. Approximately 10% of the South Korean population is involved in cryptocurrency trading, with a focus on smaller coins rather than Bitcoin.
Two weeks ago, crypto prices dipped partly due to a report indicating that South Korean exchanges might have to reduce the number of available tokens under the new rules. This highlights the sensitivity of the market to regulatory changes.
The impending legislation follows the notorious collapse of the Luna and TerraUSD tokens, created by South Korean entrepreneur Do Kwon. The implosion of these tokens in 2022 wiped out over $40 billion, triggering the push for stricter regulations. Despite the risks, enthusiasm for crypto investments remains high in Asia’s fourth-largest economy.
Highlights of South Korea’s New Crypto RegulationsUpbit, South Korea’s dominant crypto exchange, often ranks among the top five exchanges globally. Upbit and its competitors are expected to face increased operational costs as they work to comply with the new digital-asset code requirements.
The Digital Asset Exchange Alliance’s statement aimed to clarify the industry’s position and outline the steps being taken to align with the forthcoming regulations. This proactive approach is intended to maintain investor confidence while adapting to the evolving regulatory landscape.
South Korea’s cryptocurrency market, known for its speculative trading in alternative coins, will face close examination under new regulations. Yet, the industry’s focus on a gradual and thorough review process shows a dedication to following rules without abruptly disrupting trading.
As the July 19 implementation date approaches, South Korean exchanges continue to communicate their strategies for managing the transition. This includes detailed assessments of existing and new tokens to ensure they meet the standards set forth by the Virtual Asset User Protection law.
