- South Korea is on the brink of significant changes in the Bitcoin and altcoin markets.
- The Digital Asset Exchange Alliance (DAXA) has developed guidelines to reassess over 1,300 cryptocurrencies listed on local exchanges.
- This initiative, which comes into effect on July 19, 2024, aims to standardize criteria and processes for transaction support reviews to mitigate concerns related to mass delistings.
South Korea’s top crypto exchanges are set to implement new comprehensive guidelines for reassessing the listing of over 1,300 cryptocurrencies, aiming for a more regulated and transparent market.
New Guidelines to Reassess South Korean Crypto Listings
Starting from July 19, 2024, the Digital Asset Exchange Alliance (DAXA) will enact rigorous guidelines to evaluate more than 1,300 cryptocurrencies listed on South Korean exchanges. These guidelines have been developed in collaboration with 20 domestic crypto exchanges and are aimed at bringing standardization to review processes, termination procedures, and disclosure requirements.
Addressing Investor Concerns
Under the new framework titled “Best Practices for Supporting Digital Asset Transactions,” DAXA, alongside South Korea’s financial authorities, including the Financial Services Commission and Financial Supervisory Service, will introduce standardized review processes for supported assets. The emphasis is on creating a safer and more transparent market for investors, aligning with the Virtual Asset User Protection Act’s regulations.
This initiative reflects a broader move by South Korea’s legislative bodies, including the National Assembly, towards establishing a self-regulatory framework in the cryptocurrency sector. Since October 2022, a dedicated task force comprising stakeholders, academics, and legal experts has been meticulously refining these guidelines based on extensive feedback.
Mitigating Mass Delisting Fears
The cryptocurrency market in South Korea has previously witnessed proposals for self-regulation, such as those by the Korea Blockchain Association, which faced limitations due to low participation and implementation capabilities. However, the current best practices encompass comprehensive measures, including improvements in internal controls at exchanges, development of Korean white papers for cryptos, and detailed disclosure methods.
One of the primary concerns among domestic investors is the potential delisting of their invested crypto assets. Given that altcoins account for over 60% of the trading volume in the South Korean market, the new regulations could lead to significant changes. Nevertheless, DAXA has reassured investors that a mass delisting is unlikely, as major domestic exchanges supporting Korean Won (KRW) deposits and withdrawals have already started implementing these best practices preventively since late 2023. Consequently, no further mass delistings are anticipated. These exchanges have already terminated support for 39 cryptocurrencies in the first half of the year.
The revised review process involves a six-month reassessment period designed to prevent unjust delistings. During this time, exchanges will systematically communicate with coin issuing foundations or publicly disclosing entities to gather necessary information. Adequate time will be provided for disclosures and procedures, ensuring transparency with announcements made on each exchange’s homepage.
Conclusion
South Korea’s new guidelines for the reassessment of over 1,300 cryptocurrencies represent a significant step toward a more regulated and transparent crypto market. By addressing investor concerns and preventing mass delistings through standardized procedures, the DAXA initiative aims to foster a safer trading environment. As these measures come into full effect by mid-2024, the future outlook for South Korea’s cryptocurrency market appears more secure and predictable.
