Regulation
What this means for cryptocurrency investors
South Korea’s cryptocurrency market is about to see a major shakeup! New investor protection laws go into effect on July 19, forcing exchanges to reorganize and potentially delist coins. Will your favorite token survive the purge?
Let’s find out together how these regulations will reshape Korean markets.
What do these changes mean for the market and for traders?
The Virtual Asset User Protection Act, enacted on July 18, 2023 and effective July 19, 2024, is designed to safeguard cryptocurrency investors and regulate the virtual asset market. This pioneering law addresses unfair trading practices and introduces essential user protection measures, marking South Korea’s first comprehensive regulation of the virtual asset industry.
A closer look at the exchanges
Major exchanges in South Korea, such as Upbit, are preparing to comply with the new regulations. The Digital Asset Exchange Alliance, which represents these exchanges, has announced a thorough review of 1,333 altcoins over the next six months to ensure compliance. This reassessment is intended to prevent immediate mass delisting, alleviating concerns about a sudden reduction in available tokens.
Upbit, one of the world’s leading exchanges and the leading platform in South Korea, is facing increased operating costs due to these new regulations. With a 24-hour trading volume of $783 million and 204 listed coins, Upbit’s compliance efforts will be closely monitored. In particular, trading pairs such as ZRP/KRW (13.48%) and BTC/KRW (11.69%) dominate the platform, with LayerZero, BitcoinTaiko, Solana, Exchange rate risk AND Ethereal among the most important coins.
A mix of reactions
The introduction of these laws has already had an impact on the cryptocurrency market, with prices falling as investors weigh potential changes. However, specific coins such as LayerZero and Taiko have shown resilience, posting significant gains over the past week. LayerZero has seen a 7-day increase of +34.9% and a 24-hour increase of +9.2%. Taiko has seen a 14-day change of +23.9%, a 7-day change of +26.7%, and a 24-hour gain of +5.4%.
Looking forward
As the South Korean cryptocurrency market adjusts to these new regulations, investors should stay informed about potential changes in token availability and market dynamics. The coming months will be crucial in shaping the future of cryptocurrency trading in the region.
Read also: Cryptocurrency Regulation in South Korea 2024
Will stricter regulation be good for the cryptocurrency market in the long run?