South Korea devises law for constant scrutiny of 600 crypto tokens

The NFT Unicorn d2e9254b-322e-4666-9ec9-11d9fb9e0bc1 South Korea devises law for constant scrutiny of 600 crypto tokens Crypto News

The South Korean regulatory body Financial Service Commission (FSC) notified 29 registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit and Gopax, to regularly evaluate the listed tokens and whether to support their trading. 

South Korea set to enforce virtual asset user protection law

According to a report published in the Korean Times, South Korea is set to implement the virtual asset user protection law, which will come into force by July 19.

The new law imposes significant criminal punishments and fines for violations. This includes a fixed-term jail sentence of more than one year or a fine of three to five times the amount of illegal profits. Under the new law, all 29 registered crypto exchanges must review the 600 crypto tokens listed on them.

This law would require crypto exchanges to follow stricter review guidelines for token listing and review the existing listed tokens every six months to ensure they qualify under the new guidelines. After the initial review, the exchanges must conduct maintenance reviews every three months.

The South Korean government issued a new update to the Virtual Asset Users Protection Act in early February. Later in April, the FSC hinted at stricter regulatory guidelines for listing new tokens on crypto exchanges.

Related: Crypto.com expands in South Korea despite increasing regulatory scrutiny

At the time, the commission had suggested a few steps to improve market monitoring and security, like prohibiting the listing of tokens from compromised projects. The new standards may prevent tokens created by projects with security breaches and unresolved security issues from listing on local exchanges.

FSC working on more crypto guidelines

The report noted that the FSC is also working on new regulatory guidelines for crypto transactions for crypto exchanges that could come into force by next month along with the user protection law.

The financial authorities are also making changes to their organizational structures to efficiently create policies regarding the cryptocurrency sector. The FSC intends to create a new bureau that will be exclusively focused on virtual assets and will be responsible for managing the industry’s whole regulatory framework. A proposal for the same will be introduced on June 17 and reviewed by June 18.

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