South Korean Lawmaker Accuses Crypto Exchanges of Neglecting Investor Protection
A member of South Korea’s National Assembly, Min Byeong-deok, has criticized the country’s leading crypto exchanges for failing to protect investors. Min, who is part of the Political Affairs Committee, specifically targeted the five exchanges that make up the Digital Asset Exchange Association (DAXA). DAXA is a self-regulating body responsible for token listing and desisting policies. According to Min, these exchanges are neglecting their responsibility to protect investors and using unprincipled measures in their approach to cryptocurrency.
DAXA’s Reputation Takes a Hit
In recent months, DAXA has faced criticism due to apparent divisions among exchanges’ policies. For example, DAXA voted to delist the token WEMIX, but all members except Upbit have since relisted it without any formal policy changes. Confusion also surrounds DAXA’s handling of the altcoin Creditcoin (CTC), which was marketed as an overseas project but is considered a “kimchi coin” with only domestic practitioners.
Lawmaker Questions DAXA’s Responsibility
Min expressed disappointment with DAXA’s laissez-faire attitude towards guidelines on designating coins of concern and delisting. He claimed that many large exchanges do not follow their own guidelines, leading to unprincipled actions that harm investors. According to Min, DAXA’s policies have become meaningless and its self-regulation cannot avoid criticism.
Can South Korean Regulators Ensure Crypto Sector Compliance?
Min emphasized the need for regulators to enforce the Virtual Asset User Protection Act effectively. This new law, set to take effect in July 2024, will require exchanges to protect customers from scams and fraud. A lawyer at a meeting hosted by Min suggested separating exchanges’ listing and delisting committees and using independent review committees or self-regulatory organizations for token policies. In December 2023, DAXA announced its collaboration with financial regulators to crack down on undeclared crypto operators.
Hot Take: South Korean Lawmaker Calls Out Crypto Exchanges
A member of the National Assembly in South Korea has accused the country’s top crypto exchanges of neglecting their responsibilities to protect investors. The lawmaker criticized the Digital Asset Exchange Association (DAXA), a self-regulating body responsible for token listing and policies, for its inconsistent actions and confusing guidelines. He argued that exchanges are not following their own guidelines and are causing damages to investors. This criticism raises concerns about the effectiveness of self-regulation in the South Korean crypto sector and highlights the need for stronger regulatory enforcement to ensure investor protection.
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