South Korean crypto exchanges initiate token review

A consortium of 20 South Korean cryptocurrency exchanges has launched a six-month review of 1,333 digital assets to address concerns about potential mass delistings under new regulations.

The Digital Asset Exchange Alliance (DAXA) announced this initiative on July 2, aiming to mitigate the risk of sudden, widespread token removals. This review process is mandated by South Korea’s new investor protection laws, set to take effect on July 19.

Major platforms like Bithumb and Upbit must comply with these regulations, which will serve as the benchmark for future token listings. DAXA has collaborated with participating exchanges to establish best practices for reviewing and potentially delisting cryptocurrencies.

The alliance also plans to implement a more flexible “alternative screening plan” for tokens traded on reputable overseas markets for over two years. DAXA is currently identifying eligible foreign exchanges, including those recognized by the International Organization of Securities Commissions (IOSCO).

South Korea’s crypto market significance is underscored by the Korean won’s status as the most traded fiat cryptocurrency pair in Q1 2024, with $456 billion in trading volume, slightly surpassing the U.S. dollar. Upbit, the country’s largest exchange, ranks among the top 20 globally by daily trading volume.

A recent survey reveals that young South Koreans are increasingly turning to crypto and stocks as retirement alternatives, with over half of respondents aged 20-39 distrusting the national pension system. Notably, about 7% of election candidates own digital assets, according to their asset disclosures.

The South Korean government is preparing to introduce stricter regulations for token listings, including measures to block hacked tokens. Financial authorities are expected to release guidelines for virtual asset trading support by early next month.

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