South Korean financial authorities are set to implement stringent regulations governing token listings on centralized crypto exchanges, signaling a significant shift in the regulatory landscape. These new guidelines aim to bolster security measures and transparency in the listing process.

New Guidelines for Token Listings

By the end of April or early May, South Korean financial authorities plan to release updated guidelines that impose tighter restrictions on token listings. Among the key provisions, digital assets with a history of hacking incidents will be prohibited from listing on domestic exchanges unless the root cause is thoroughly investigated and addressed.

Additionally, foreign digital assets seeking listing on South Korean exchanges must provide a white paper or technical manual tailored specifically for the South Korean market. This requirement underscores the authorities’ emphasis on transparency and regulatory compliance.

However, tokens already listed on licensed exchanges for over two years may be exempt from some of these new criteria. This exemption recognizes the maturity and stability of tokens with a proven track record in the market.

Mandatory Disclosure for Exchanges

The directives may also mandate that exchanges remove cryptocurrencies from their listings if issuers fail to adequately disclose essential information, such as discrepancies in circulation amounts. This requirement aims to enhance investor protection and market integrity.

Consultation with Stakeholders

The South Korean government is actively soliciting feedback from local exchanges and industry stakeholders in the formulation of these listing guidelines. This collaborative approach ensures that the regulations are comprehensive and considerate of the industry’s dynamics.

Legislative Updates and Industry Developments

South Korea recently updated the Virtual Asset Users Protection Act to impose significant penalties for violations, reflecting the government’s commitment to combating illicit activities in the crypto space. This legislative overhaul follows the industry crisis involving Terraform Labs and its founder, Do Kwon, which resulted in substantial losses.

Enhanced Tax Enforcement and Financial Oversight

Furthermore, South Korean authorities have intensified efforts to combat tax evasion and illicit activities in the crypto market. The Gyeonggi Provincial Tax Justice Department reported a significant increase in non-declared taxes collected after implementing a digital tracking system for crypto accounts.

The Financial Intelligence Unit of South Korea revealed a surge in suspicious transactions flagged by domestic digital asset exchanges in 2023. This heightened scrutiny underscores the government’s commitment to strengthening regulatory oversight and combating financial crimes in the crypto sector.