Altcoins
South Korea could delist 600 Altcoins under new law
South Korean financial authorities could delist around 600 altcoins this year under the new Virtual Asset User Protection Law, starting next month.
The move follows the upcoming Virtual Asset User Protection Act, which comes into force on July 19 and aims to improve regulatory compliance in the crypto sphere.
Recent reports from local media indicate that the South Korean government has finalized a strict framework called a best practices plan to support virtual asset transactions.
This plan sets out rigorous criteria that cryptocurrencies must meet to remain listed on national exchanges. Unlike the current system in which exchanges conduct their own reviews, the new approach involves authorities setting standards for all listed tokens.
The central point of these regulations is the list controls. Exchanges will now reassess their support for each virtual asset every six months, followed by subsequent reviews every three months. Assets that do not meet prescribed standards risk suspending transaction support.
The new criteria encompass nine key aspects, including suitability for listing, reliability of the issuer, user protection mechanisms, technological security and compliance with local laws.
Reliability checks will involve reviewing disclosure practices and information flow, while user protection assessments will focus on tracking blockchain activities and whitepaper accessibility.
Technical security is also paramount, with cryptocurrencies needing to have an impeccable hacking history and transparent smart contract source codes. Tokens whose transaction history is obscured or issued directly by exchanges, among others, will be delisted.
Issuers must present complete information, solid issuance plans and credible business records, with South Korean authorities reserving the right to challenge listings based on qualitative criteria, with the exception of assets with an impeccable track record. on well-regulated foreign exchanges.
Regulatory changes in South Korea could have a significant impact on the local crypto scene, particularly affecting altcoins with low trading volumes and problematic disclosures, given the country’s 29 national crypto exchanges like Upbit.
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