Deniz 
On Tuesday, South Korea’s 20 crypto exchanges and its representative body jointly created a new code of conduct for local cryptocurrency companies. This will mean a reassessment of more than 1,300 currently traded cryptocurrencies on home markets.
Industry group Digital Asset Exchange Association (DAXA) said in the press release that the recently released self-regulating rules for industry players will be followed on July 19, the same day South Korea’s first legislative framework for crypto investor protection takes effect.
“If in the future a new cryptocurrency is to be listed, the exchange will need to analyze the token on both formal and qualitative requirements,” the announcement added, outlining the guidelines the industry alliance will impose on its member companies.
The formal criteria, which define standards on issuer credibility, investor protection measures, security, and compliance, are non-negotiable—that is, a token that does not fit any one of the criteria cannot be listed for trading. “Quality criteria take into account and investigate the project holistically over several elements,” the rules said. Every quarter, the review is supposed to take place.
Impact on Existing Crypto Tokens
The new guidelines also demand local exchanges create an independent decision-making body for token listings and have every significant listing and delisting decision carried out under the most recent set of guidelines. The announcement claimed that the decision-making process of token listings should be recorded and preserved for fifteen years for more fairness and openness.
Existing crypto tokens now traded on local exchanges will also be under review, but within a six-month grace period, the publication stated. 1,333 crypto tokens were traded in South Korea as of the end of 2023.
Nonetheless, DAXA pointed out that since big South Korean crypto exchanges have already been following the guidelines, it is doubtful that such tests will cause significant delistings of altcoins.
Known to be altcoin-heavy, South Korea boasts one of the biggest markets for cryptocurrencies worldwide. Kaiko statistics revealed that the most often used fiat money for trading cryptocurrencies in the first quarter of 2024 was South Korean won. Processing over $30 billion worth of crypto transactions in June, Upbit is the biggest exchange in the nation.
The first crypto law in the nation, the Virtual Asset User Protection Act, seeks to abolish illegal market activities, including exploiting hidden information for crypto investments, market price manipulation, and fraudulent transactions. To preserve user assets and register in insurance programs for possible user compensation in the case of security breaches, it also mandates crypto service providers to safeguard over 80% of deposits in cold storage.
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