Regulation
Financial watchdog clarifies role in South Korea’s new cryptocurrency compliance crackdown
South Korea’s Financial Supervisory Service (FSS) has clarified its role regarding the alleged removal of numerous digital assets from local cryptocurrency exchanges
On June 17th, relationships It emerged that the FSS had instructed registered cryptocurrency exchanges, including Upbit, Bithumb and Gopax, to evaluate several tokens on their platforms. This directive is in line with the Act on the Protection of Users of Virtual Resourceswhich imposes strict compliance and periodic evaluations of listed tokens.
According to the new law, exchanges must follow stricter guidelines for token listings and revalue existing tokens every two years. They are required to evaluate the reliability of the issuing entity, user protection measures, technology, security standards and regulatory compliance of these digital assets.
The legislation also provides for severe penalties for non-compliance, including a minimum one-year prison sentence or fines ranging from three to five times the illegal profits generated by the business. As a result, investors fear that up to 600 altcoins could be delisted during these revisions. triggering mass panic selling.
In response to these rumors, the FSS denied direct involvement in the listing or removal of virtual assets from exchanges. The regulator stressed that it merely sets listing standards, not oversees the review process. It declared:
“Financial authorities inspect virtual asset operators and do not directly examine stocks. We participated [in the initial processes] because there was a request to provide support in creating best practices, but announcements will be made by the exchange and DAXA.”
Furthermore, there are reports that the FSS intends to create a new division dedicated to the regulation of cryptocurrencies. This division would be responsible for policy development, regulatory oversight and creating a framework for the growing sector.
Posted in: South Korea, Regulation