South Korea’s Financial Supervisory Service (FSS) has been in the spotlight following rumors of the removal of various digital assets from local crypto exchanges. Reports suggested that the FSS instructed registered exchanges like Upbit, Bithumb, and Gopax to conduct evaluations of several tokens on their platforms. This move is in line with the Virtual Asset User Protection Act, which requires strict compliance and regular assessments of listed tokens.
The new legislation mandates exchanges to adhere to stricter guidelines for token listings and conduct biannual reassessments of existing tokens. Exchanges are now required to evaluate factors such as the reliability of the issuing entity, user protection measures, technology, security standards, and regulatory compliance of the digital assets listed on their platforms. Non-compliance could lead to severe penalties, including jail terms and substantial fines.
Despite rumors suggesting otherwise, the FSS clarified that it does not directly engage in the listing or delisting of virtual assets on exchanges. The regulator stated that its role is limited to establishing listing standards, not overseeing the review process. The FSS emphasized that financial authorities inspect virtual asset operators but do not directly review stocks. Any announcements regarding delisting decisions would be made by the exchanges and the Digital Asset Exchange Association (DAXA).
In addition to the ongoing discussions surrounding crypto regulations, there are reports indicating that the FSS is considering the creation of a new division dedicated solely to crypto regulation. This division would be responsible for policy development, regulatory oversight, and establishing a framework for the rapidly growing crypto sector in South Korea.
The evolving regulatory landscape in South Korea is creating uncertainty and concern among investors and crypto enthusiasts. While the FSS aims to ensure compliance and protect consumers, the potential delisting of numerous altcoins has raised fears of mass panic selling. It remains to be seen how the new regulations will impact the digital asset market in South Korea and whether the creation of a dedicated crypto regulation division will bring clarity and stability to the sector.
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