South Korea introduces new Crypto Exchange Guidelines

Paigambar Mohan Raj
Source: Coingape

Following the demise of the Terra network, Korean exchanges have been very keen on having some form of an emergency measure to counter such an event in the future. The Terra debacle left many in a state of shock. It is no surprise that the authorities don’t want this situation to repeat itself.

On 14th June, a local Korean news outlet, Daily Sports, reported that major Korean exchanges have agreed to an emergency system, should another Terra-like collapse occur.

As per the report, an agreement was reached on June 13th, during a meeting of the National Assembly, South Korea’s legislature, to discuss market fairness. The meeting was attended by five of the nation’s top cryptocurrency exchanges, namely Upbit, Bithumb, Coinone, Korbit, and Gopax.

Members of the National Assembly, exchange executives, and Financial Supervisory Services (FSS) Chairman Lee Bok-Hyeon addressed the new code of conduct that exchanges would voluntarily follow to safeguard investors.

How will South Korea tackle a Terra-like situation in the future?

The code intends to standardize token listings and delistings to enhance regulatory compliance and eliminate differences in listing guidelines between each exchange.

The first phase of the new code will be put in action in September. A warning system based on the new code will be implemented to alert investors to abnormally high-risk virtual assets due to anomalous price movements or other odd activities.

And then in October, listing regulations will be evaluated and a routine evaluation system will be implemented for all listed tokens.

The Terra collapse saw losses in the billions of dollars, and all eyes were on its South Korean founder, Do Kwon. Kwon is currently facing a long list of accusations, even that of tax evasion in the $40 million mark.

Domestic exchanges have taken a lot of the blame for letting investors trade Terra (LUNA) when it was on its death spiral. The number of Korean LUNA holders had grown by 180% between May 6th and May 18th. The proposed restrictions would try to prohibit exchanges from enabling investors to trade with such volatile tokens by shutting off trading within 24 hours or delisting them outright.