South Korean Crypto Exchanges Unveil Guidelines to Prevent Mass Delistings
South Korean crypto exchanges, operating under the Digital Asset Exchange Alliance (DAXA), have introduced new guidelines to avoid widespread delistings in anticipation of upcoming legislation focused on curbing market manipulation. These guidelines aim to standardize the criteria for supporting and ending digital asset trading on exchange platforms, according to DAXA’s statement released on Tuesday.
Review of Existing Digital Assets
- The alliance plans to review 1,333 existing digital assets over a six-month period to ensure a systematic approach.
- DAXA, a consortium of major South Korean cryptocurrency exchanges, intends to work with financial authorities and experts to refine their standards.
Enhanced Transparency and Compliance
- The objective is to enhance transparency, leading to improved compliance and reducing the risk of assets being removed from exchanges.
- Major domestic exchanges have already been implementing key criteria following best practices since late 2023, reducing the likelihood of extensive delistings happening simultaneously.
Guidelines Focus Areas
- Transparency in information disclosure
- Prohibition of fees for trading support
- Comprehensive review criteria covering issuer credibility, user protection measures, technology and security standards, and regulatory compliance
Information Disclosure Requirements
- Exchanges are mandated to provide essential information, such as white papers and important issuer announcements, to comply with the guidelines.
- User protection measures include issuing termination notices and granting grace periods for users to manage their assets.
The introduction of these guidelines precedes the implementation of South Korea’s “Virtual Asset User Protection Act,” scheduled to come into force on July 19. This act, created in response to the aftermath of the FTX collapse, establishes stricter controls and standardized practices across exchanges to prevent market manipulation and safeguard investors.
Hot Take: Stricter Guidelines for Crypto Exchanges in South Korea
The new guidelines introduced by South Korean crypto exchanges under the Digital Asset Exchange Alliance aim to enhance transparency, promote compliance, and prevent mass delistings. By reviewing existing digital assets, focusing on key areas such as information disclosure and user protection, and collaborating with financial authorities, exchanges are striving to establish standardized practices and protect investors in the evolving crypto landscape.
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