South Korea cryptos: New legislation mandates continuous review of tokens by exchanges

New crypto legislation in South Korea provides for a continuous review of tokens that must be carried out by exchanges. According to information published by The Korea Times, South Korea must implement the law on protecting users of virtual assets by July 19th.

Recently, the South Korean financial regulator, the Financial Services Commission (FSC), sent notices to 29 exchanges registered in the country, including Upbit, Bithumb, Coinone, Korbit and Gopax, where it highlighted that companies must regularly review tokens listed on their platforms as well, evaluate whether they should be listed.

In case of violations, criminal punishments and fines will be imposed by the new legislation, including a prison sentence of more than one year or a fine of up to five times the amount of illegal profits. The law provides that all exchanges must review the more than 600 cryptocurrency tokens that are listed on their respective platforms. After cryptocurrency companies carry out an initial review, the measure should happen again every three months.

It is worth remembering that, in February, the South Korean government released a new update to the Law on Protection of Users of Virtual Assets. In an official announcement at the time, the South Korean Financial Services Commission (FSC) disclosed that criminals in the crypto sector who commit illicit market acts could face criminal punishments, up to and including life sentences.

The regulator highlighted that, in order to protect users of virtual assets and establish order in the virtual asset market, the “Virtual Asset User Protection Law”, enacted on July 18, 2023, will come into force on July 19 of 2024. The Virtual Asset User Protection Act is a bold move to build a robust legal framework, marking the country’s first significant step in this direction.

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The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.