Report: South Korea to introduce stricter guidelines for crypto exchange listings

South Korean financial authorities are gearing up to release new guidelines aimed at imposing stricter regulations on token listings on centralized crypto exchanges, according to a local media report.??

The move follows the?approval?of the Virtual Asset User Protection Act by the South Korean National Assembly in the second half of 2023 which firmly sets the groundwork for constructing a legal framework governing all digital asset-related activities in the East Asian nation.??

Key Highlights of the Guidelines??

News1 reported that the forthcoming guidelines are expected to introduce several measures to enhance oversight and security within the cryptocurrency market. This includes preventing the listing of tokens from hacked projects. Tokens issued by projects that have experienced security breaches and have not yet resolved their security issues may be barred from listing on local exchanges under the new guidelines.??

Another one is the requirement for specific whitepapers. Foreign token projects seeking listing on domestic exchanges may be required to develop specific whitepapers tailored for the South Korean market. However, tokens already listed on licensed exchanges for over two years may be exempt from this requirement.??

The guidelines also mandate the disclosure of information. Exchanges may be mandated to delist cryptocurrencies if their issuers fail to disclose necessary information accurately. Instances where the actual circulation number does not match the disclosed amount could lead to delisting.??

Timeline and consultation process??

The South Korean government aims to issue the new guidelines as early as later this month. Before their release, authorities are actively seeking feedback from local exchanges to ensure that the guidelines effectively address market needs and concerns.??

Response from regulatory bodies

While the Financial Services Commission, the leading regulatory body overseeing the local financial sector, has not yet responded to requests for comment on the matter, the proposed guidelines signal a proactive stance by South Korean authorities to enhance regulatory oversight and security measures within the burgeoning cryptocurrency market.