Recently, there have been reports circulating about the Financial Supervisory Service (FSS) of South Korea instructing registered crypto exchanges to evaluate the tokens listed on their platforms. This directive is in line with the Virtual Asset User Protection Act, which requires exchanges to adhere to strict compliance measures and regularly assess the tokens they list. Under this new law, exchanges are mandated to follow stringent guidelines for token listings and reevaluate existing tokens biannually.
Despite the rumors suggesting that up to 600 altcoins may be delisted from local exchanges, the FSS has denied direct involvement in the listing or delisting of virtual assets. The regulator clarified that its role is limited to setting listing standards and not overseeing the review process. According to the FSS, financial authorities inspect virtual asset operators but do not directly review stocks. The FSS stated that any announcements regarding the review process will be made by the exchanges and the Digital Asset Exchange Association (DAXA).
In addition to the directives surrounding token evaluations, there are reports indicating that the FSS is planning to establish a new division dedicated to crypto regulation. This division would be tasked with policy development, regulatory oversight, and creating a framework for the rapidly growing cryptocurrency sector in South Korea.
The new regulations and potential delistings of digital assets could have significant implications for both investors and crypto exchanges in South Korea. Investors are concerned about the possibility of mass panic selling if tokens are delisted, leading to substantial losses. Exchanges, on the other hand, will need to ensure they are in compliance with the stricter guidelines set forth by the FSS to avoid penalties.
The FSS’s recent actions and statements have created a sense of uncertainty and concern within the South Korean crypto community. The establishment of a new division for crypto regulation, coupled with the rumored delistings of altcoins, underscores the need for exchanges and investors to stay informed and compliant with the evolving regulatory landscape in the country.
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