Coinspeaker
South Korea’s Crypto Exchanges Prepare for New Investor Protection Rules
As the South Korean government is preparing to implement the Virtual Asset User protection law on July 19, top crypto exchanges in the country are already getting ready for changes the new regulation will bring. The law is meant to protect investors. However, there are suggestions that it might affect the altcoin trading in the country.
The Asian country is making a lot of crypto-related improvements, making it a major player in the industry. In fact, the Korean won surpassed the US dollar as the most used currency for trading cryptocurrency in the first quarter of this year. Also, the trading activity in South Korea is quite different, as more focus is placed on smaller cryptocurrencies rather than Bitcoin.
Crypto Exchange Alliance’s Approach to Compliance
In response to upcoming regulation, the Digital Asset Alliance, which represents crypto companies, has said it will conduct a proper review of 1,333 altcoins over the next six months. They plan on ensuring that these tokens comply with the new protection law and pushing back the idea that the impending regulation will abruptly stop people from trading these lesser-known digital coins.
The alliance further boosted its users’ optimism by stating that it is unlikely that tokens will be mass-removed due to the extended evaluation period. They also noted that, henceforth, any new tokens will be assessed using the Virtual Asset User Protection law. This gradual approach suggests the regulations will be implemented slowly instead of delisting all at once, which could cause a big disruption in the market.
Challenges of Balancing Investor Safety and Altcoin Trading
The new regulation demands that crypto exchanges within the country comply with basic rules for token listing and that existing ones be reassessed every six months. They must also conduct reliability tests on the issuing entity, security standards, and regulatory compliance of these crypto coins. Punishment has been put in place for platforms that fail to comply with the new development, which could be a minimum of one year of jail term or fines.
The new rules can be partly ascribed to the collapse of Luna and TerraUSD tokens, developed by South Korean citizen Do Kwon, to which over $40 billion got lost. Thus, the government is ensuring its citizens are kept safe from falling victim to such a scenario again. Therefore, while the country is trying to safeguard its citizens, the crypto exchanges might also be feeling the heat as it may become expensive to run their businesses.
The new regulation will be crucial to crypto development in South Korea, as the government will be watching virtual asset providers in the country closely. Crypto investors in the country should keep themselves informed and verify changes in token availability before investing.
South Korea’s Crypto Exchanges Prepare for New Investor Protection Rules
