The government plans to review the listing of about 600 coins traded on domestic cryptocurrency exchanges. If it does not meet the standards, delisting is possible, raising concerns that so-called K-Coin delisting may occur.
What's New: According to a Chosun Ilbo report on the 16th, financial authorities have recently finalized and are planning to distribute a best practice plan for virtual asset transaction support (listing). It will be applied to all exchanges in line with the enforcement of the Virtual Asset User Protection Act on July 19th.
The key is listing screening. Currently, all listed cryptocurrencies have gone through their own internal review by the exchange, but once a best practice plan is developed, there is a high possibility that another review will be conducted according to the standards established by the authorities. Chosun Ilbo quoted a financial authority official as saying, “The exchange will review whether to maintain transaction support for virtual asset items traded for six months,” and added, “Thereafter, maintenance review will be conducted once every three months.”
Background of the problem: There are a total of 9 screening requirements currently being discussed. First, we examine whether the cryptocurrency is in a format that can be listed. There are four major areas of review: ▲issuer reliability ▲existence of user protection devices ▲technology security level ▲compliance with domestic laws and regulations.
Regarding issuer reliability, the screening requirements include whether the cryptocurrency issuer properly discloses information and whether the circulation of the issued cryptocurrency can be confirmed. Regarding users, we look at whether they have an on-chain explorer that can track white papers and blockchains.
In terms of technical security, there must be no history of hacking, and smart contract source code must also be disclosed. Lastly, coins directly issued by exchanges, ‘dark coins’ that can hide transaction history, and other cryptocurrencies that violate current laws cannot be listed.
Important point: What is unique is that in addition to these factors that can be categorized as ‘yes’ or ‘no’, there are also qualitative review requirements. In order to maintain listing status on domestic exchanges, you do not simply have to meet the eight conditions mentioned above. Disclosure must be made without omitting important information, a reasonable issuance and circulation plan must be established, and the capabilities and past business history of the coin issuer must also be judged.
In fact, even if all formal requirements are met, the reviewer can take issue with the qualitative requirements if he or she wants to. The good news is that there is some sort of exception to the rule. Some screening requirements are relaxed for cryptocurrencies that have been traded without problems for more than two years on overseas cryptocurrency exchanges with sufficient regulations. Accordingly, it appears that there will be mixed feelings between cryptocurrencies that have been created and listed for more than two years and those that have not.
What happens next: Currently, there are a total of 29 domestic cryptocurrency exchanges. It is understood that a total of 600 types of cryptocurrencies are listed on domestic exchanges.
An official in the domestic cryptocurrency industry, who requested anonymity, predicted that the withdrawal of domestically listed coins will continue from July 19th, when this measure is taken. He said, “Starting with ‘K Coin’, which has low trading volume and problems with listing announcements, it will be delisted after being designated as a cautionary stock,” adding, “Due to the nature of the Korean market, where altcoin trading volume accounts for more than 60%, the domestic cryptocurrency market may shrink significantly. “He said.
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