The five leading cryptocurrency exchanges in South Korea – Upbit, Bithumb, Coinone, Korbit, and Gopax – will reportedly set up a joint consultative body that will oversee the local digital asset market, scheduled to go live during the second half of 2022.
Trying to Prevent Another Accident Like Terra
A local media revealed that Korea’s major platforms will join forces to grant additional protection for crypto investors. They vowed to sign a business agreement and then launch a joint consultative body to improve the regulatory standards in the space. They will also create a communication channel where victims and affected companies could address arising issues.
The consultative body will be divided into three areas: transaction support, market monitoring, and compliance monitoring. The first action is scheduled for September this year, when the exchanges will prepare a virtual currency warning system and delisting standards. Additionally, the companies will provide valuable information, including evaluation reports and white papers.
If there are any indications that certain cryptocurrency projects are related to money laundering activities or they pose a threat to the financial system, investors will receive a warning.
In October, the platforms plan to introduce guidelines for listing screening. They will also periodically check the possible risks in the market and act urgently in need.
Subsequently, from January 2023, new crypto investors will not be allowed to enter the ecosystem before completing the relevant educational video.
South Korea has been in the spotlight of the digital asset scene because of last month’s fiasco surrounding the local blockchain platform – Terra. Its native token – LUNA – and its algorithmic stablecoin – UST – crashed to virtually zero. As a result, numerous investors lost millions, and some even committed suicide.
The Korean Authorities are Acting, too
Earlier this month, the South Korean financial watchdogs urged for applying comprehensive rules in the cryptocurrency sector so cases like the LUNA/UST crash could be prevented. Yun Chang-hyun – a lawmaker and leader of the ruling People Power Party’s virtual assets committee – insisted on conducting a meeting with the top five exchanges so they could together design a regulatory framework.
In his view, the domestic digital asset industry was “neglected for too long without order and discipline,” which could be one of the reasons why such crashes occur.
So far, four platforms have confirmed they want to participate in that meeting. They also promised to release official announcements if any guidelines were set up.