A group comprising 20 cryptocurrency exchanges in South Korea has stepped in to ease worries surrounding the updated regulatory landscape for digital assets. They have reassured investors about the unlikelihood of widespread token removals. The Digital Asset Exchange Alliance (DAXA) made a declaration on July 2, stating their plan to conduct a thorough assessment of 1,333 cryptocurrencies over the next six months under the newly enacted laws focused on safeguarding crypto users.
Swift Action by South Korean Exchanges
In response to this development, major South Korean exchanges such as Bithumb and Upbit have committed to reviewing the cryptocurrencies listed on their platforms. This aligns with the upcoming investor protection laws slated to be enforced from July 19. DAXA specified that any new token listings will be subject to evaluation based on the rules outlined in the Crypto Asset User Protection Act. Moreover, DAXA has devised a set of best practices to assist the 20 exchanges in evaluating and potentially removing certain cryptocurrencies.
The criteria put forth by DAXA will evaluate token-issuing entities on aspects like credibility, user safeguarding, and adherence to regulations, offering a systematic method for assessing digital assets.
South Korea's Significance in the Crypto Landscape
DAXA emphasized that cryptocurrencies traded in reputable overseas markets for a minimum of two years may undergo a less stringent review process. Collaborating with exchanges, DAXA aims to create a list of recognized foreign markets, possibly including those overseen by the International Organization of Securities Commissions (IOSCO).
South Korea has emerged as a key participant in the global cryptocurrency arena. During the first quarter of the current year, the South Korean won dominated as the most traded fiat currency pair, with an exchange volume of $456 billion, exceeding the US dollar's $455 billion. Presently, Upbit, the largest exchange in South Korea, ranks among the top 20 exchanges worldwide, with a daily trading volume of $889.3 million, according to CoinGecko.
Key Points for Investors
• When evaluating tokens, focus will be on credibility, user protection, and compliance. • Cryptocurrencies traded in regulated global markets for over two years will face more lenient scrutiny. • DAXA provides a structured framework to aid exchanges in reviewing and potentially eliminating tokens.
These measures are intended to boost transparency and security for South Korean cryptocurrency investors, mitigating the risk of abrupt token removals and fostering a more stable market environment.
