The South Korean financial regulator, the Financial Service Commission (FSC), has notified 29 registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit and Gopax, to regularly evaluate the tokens listed on their exchanges and whether to continue supporting their trading.
South Korea set to enforce law on virtual asset user protection
According to a report in The Korea Times, South Korea will implement a law on virtual asset user protection by July 19.
The new law imposes significant criminal punishments and fines for violations. This includes a fixed-term jail sentence of more than one year or a fine of three to five times the amount of illegal profits. Under the new law, all 29 registered crypto exchanges must review the more than 600 crypto tokens listed on them.
The law would require crypto exchanges to follow stricter review guidelines for token listings and review existing listed tokens every six months to ensure they meet the new guidelines. After the initial review, exchanges must conduct maintenance reviews every three months.
The South Korean government issued a new update to the Virtual Asset Users Protection Act in early February. In April, the FSC hinted at stricter regulatory guidelines for listing new tokens on crypto exchanges.
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At the time, the commission had suggested a few steps to improve market monitoring and security, such as prohibiting the listing of tokens from compromised projects. The new standards may prevent tokens created by projects with security breaches and unresolved security issues from listing on local exchanges.
FSC working on more crypto guidelines
The report notes that the FSC is also working on new regulatory guidelines for crypto transactions on exchanges, which could come into force by July along with the user protection law.
Authorities are also making changes to their organizational structures to create policies for the cryptocurrency sector more efficiently. The FSC intends to create a new bureau that will exclusively focus on virtual assets and manage the industry’s whole regulatory framework. A proposal for the same will be introduced on June 17 and reviewed by June 18.
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