South Korea has been actively taking part in examining cryptocurrencies and developing laws governing the industry. Since the downfall of Terraform Labs, these initiatives have gotten more rigorous. More recently, the exchanges operating in the country will reportedly begin reviewing the tokens that they have listed. South Korea’s regulator, the Financial Service Commission [FSC], has specifically alerted 29 registered cryptocurrency exchanges to conduct an internal audit.
The latest law will go into effect in July. It requires the 29 exchanges to evaluate over 600 cryptocurrencies that they hold. The list of registered exchanges includes Upbit, Bithumb, Coinone, Korbit, and Gopax. Failure to do so might lead to substantial criminal penalties, which include a fixed jail sentence of more than a year. In addition, a fine of three to five times the amount of unlawful gains. A South Korean publication further said,
“We will allow virtual asset exchanges to review whether to maintain trading support for virtual asset items that have been trading for six months. It is inevitable that transaction support will be suspended for virtual asset items that do not meet the standards for maintaining transaction support.”
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How Will These Cryptocurrency Exchanges Review Over 600 Tokens?
The SFC’s guidelines are very clear. The regulator expects exchanges to prohibit the listing of coins from hacked projects. Assets developed by projects that have had security breaches or security concerns that are unsolved are also banned from being listed.
The South Korean government expects these exchanges to carry out this process every six months. The evaluation is done so often to guarantee that both new and existing guidelines are met. Right after the first process, exchanges must conduct quarterly maintenance reviews.
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