Recently, the Financial Supervisory Service (FSS) of South Korea has made it clear that it is not directly involved in the listing or delisting of virtual assets on local crypto exchanges. Instead, the FSS’s role primarily focuses on establishing listing standards and providing support in creating best practices. This clarification comes in response to rumors circulating about the removal of numerous digital assets from exchanges like Upbit, Bithumb, and Gopax.
The directive given to registered crypto exchanges to evaluate several tokens on their platforms is in accordance with the Virtual Asset User Protection Act. This legislation requires exchanges to adhere to stringent compliance measures and regularly assess the tokens listed on their platforms. Exchanges are now obligated to evaluate aspects such as the reliability of the issuing entity, user protection measures, technology, security standards, and regulatory compliance of digital assets. Non-compliance with these regulations can lead to severe penalties, including hefty fines or even jail time.
There have been concerns raised by investors regarding the potential delisting of up to 600 altcoins during the review process. This has led to fears of mass panic selling in the market. However, the FSS has denied direct involvement in the decision-making process of listing or delisting virtual assets. The responsibility lies with the exchanges themselves to make announcements regarding such actions.
In response to the growing importance of cryptocurrencies and digital assets, reports suggest that the FSS is considering establishing a new division dedicated to crypto regulation. This division would be tasked with policy development, regulatory oversight, and creating a framework for the rapidly expanding sector. This move signifies the government’s recognition of the need for specialized expertise in managing and regulating the crypto industry.
The FSS’s recent statements regarding the regulation of digital assets on exchanges provide clarity on their role in overseeing the crypto market in South Korea. While there may be concerns about potential delistings and regulatory actions, it is crucial for exchanges and investors to adhere to the established guidelines to ensure a transparent and compliant market environment. The creation of a new division focused on crypto regulation also highlights the government’s commitment to staying abreast of developments in the fintech sector.