Stricter Listing Requirements for Cryptocurrencies on Korean Exchanges
South Korea’s largest crypto exchanges are gearing up for a comprehensive reassessment of assets. According to The Block, over 1,300 cryptocurrencies will be reviewed under new, stricter self-regulation standards effective from July 19.
South Korea’s Crypto Market Landscape
South Korea remains one of the largest and most active cryptocurrency markets globally. Kaiko data shows that in Q1 2024, the South Korean won (KRW) surpassed the US dollar (USD) in trading volumes on crypto exchanges. Upbit, the country’s largest crypto exchange, saw over $30 billion in trading volume in June, as per The Block.
Popularity of Speculative Cryptocurrencies
South Korea stands out for its high trading activity in speculative cryptocurrencies. Altcoins like DOGE and SHIB are more popular than flagship cryptocurrencies like Bitcoin or Ethereum. On average, altcoin trades make up over 80% of trading activity on Korean crypto exchanges.
New Code of Conduct for Crypto Exchanges
On June 2, 20 leading South Korean crypto exchanges, united in an association, approved a new code of conduct and standards for the crypto industry. This move will lead to a major reassessment of over 1,300 cryptocurrencies currently traded on Korean exchanges.
Implementation of New Standards
According to a press release from the Digital Asset Exchange Association (DAXA), the new self-regulation standards will take effect on July 19. This coincides with the enactment of South Korea’s first regulatory framework for protecting cryptocurrency investors.
“Tokens will undergo rigorous checks before listing, based on both formal and qualitative criteria,” the press release stated. Cryptocurrencies already being traded will be evaluated after a six-month grace period.
Criteria for Token Evaluation
The new requirements demand that tokens meet several criteria related to issuer reliability and investor protection. “Qualitative requirements include a comprehensive project assessment based on various factors,” the rules outline. “Reviews are planned quarterly.” Tokens failing to meet these criteria will not be allowed for trading on exchanges.
Legislative Background
In July 2023, South Korea passed the Virtual Asset User Protection Act with a one-year grace period. This law aims to combat the use of undisclosed information for investments, price manipulation, and fraud.
Potential for Mass Delisting
Despite the new rules, the likelihood of mass delistings is low. DAXA stated that major South Korean exchanges already adhere to high standards in organizing cryptocurrency trading.
