Local news outlets recently reported that South Korea’s finance officials are tightening down on domestic exchanges and token listing chronicles.
In an extraordinary turn of events, South Korea’s financial regulators recently cracked down on virtual assets nationwide, revealing a more rigorous approach to token listings on CEXs.
The South Korean regulators’ action, which coincided with escalating crypto-related inconsistencies worldwide, further emphasized the importance of formulating streamlined regulations that supervise users’ secure and protected engagement in this technology.
In South Korea, cryptocurrencies with a history of hacking issues are not allowed to trade on domestic exchanges until the full reason for the occurrence is reported to the authorities, according to a recent report by a local news outlet.
However, foreign virtual assets will only need a white paper or technical handbook available for the Korean market to be listed on domestic CEXs.
The Korean crypto community was in a state of hysteria in response to this decision by the country’s financial regulators; users expressed immense relief.
Meanwhile, local news channels reported that the authorities intend to enforce these standards by the end of this month or at the start of the following month, an unprecedented development in the country’s cryptocurrency industry.
An Analysis of the Revamped Crypto Approach
Recent reports indicate that since the latter part of the previous year, the Financial Supervisory Service (FSS) has been in collaboration with organizations such as DAXA (Digital Asset Exchange Association) in an ongoing effort to develop listing guidelines for virtual asset exchanges.
Nevertheless, in light of the Virtual Asset User Protection Act’s implementation, it was considered imperative to establish official standards, notwithstanding the joint listing review guidelines already in place at DAXA.
The Act’s enactment also underscored the importance of establishing a standard listing process for virtual asset exchanges.
Consequently, regulatory bodies are presently engaged in the process of formulating all-encompassing principles and seeking input from exchanges.
These principles would prohibit virtual assets listing implicated in security breaches or hacking incidents on domestic CEXs until the underlying cause is elucidated or the incurred damages are recouped.
South Korea’s New Token Listing Strategy
Interestingly, since the latter part of last year, several malware incidents have transpired in South Korea, which have been detrimental to prominent cryptocurrency projects including Play Dapp (PLA), Galaxia (GXA), Orbit Chain (ORC), and Somesing (SSX).
As stated previously, this is predominantly attributable to the ruling out of a new crypto regulatory policy.
Simultaneously, the majority of the aforementioned tokens were delisted from DAXA-affiliated exchanges due to the inability to determine the source of the attack.
Galaxia, which recouped losses via ‘buyback,’ remained listed on Gopax, a South Korean cryptocurrency exchange platform.
According to South Korean regulators, the unresolved causes of the breach could impede the re-listing process.
Consensus with this appears to have precluded the implementation of new, more stringent regulations regarding token listings across the country.
