A Consultative Body for Korean Digital Asset Exchanges has been established.
Leading South Korean digital asset exchanges have decided to organize a consulting group to prevent such disasters from happening again, such as the Terra (LUNA) ecosystem breakdown, which resulted in severe losses.
By the second half of 2022, the exchanges, which include Upbit, Bithumb, Coinone, Korbit, and Gopax, hope to have strong and uniform screening methods in place before listing cryptocurrencies, according to South Korean news agency YNA.
Notably, the exchanges’ decision comes after most trading platforms were criticized for their lack of coordination in dealing with the Terra ecosystem’s collapse. A meeting with the government titled
“Recovering Fairness in the Virtual Asset Market and Protecting Investors”
resulted in the newest proposal to avoid similar incidents.
Creating screening criteria
Before founding the joint consultative council, the exchanges reportedly signed a commercial agreement as part of the arrangement. The next step is to strengthen asset listing standards so that they can be utilized as a communication channel in the event of an emergency. The consultative body will be organized into three sections in the proposal: transaction support, market monitoring, and compliance monitoring.
The plan’s first key component, a virtual currency warning system and delisting standard, will be made public in September. It will also contain details on digital assets such as white papers and evaluation reports.
In a crisis such as the LUNA crash, the consultative group will prepare crisis preparations and examine issues such as whether or not deposits and withdrawals should be allowed. The feedback is said to be offered within 24 hours.
By October, the agency plans to provide revised crypto screening standards as well as the implementation of a risk assessment period. The committee admitted that they would be abandoning their former method of appraising digital assets on the basis of technological efficiency. The new guideline, on the other hand, will analyze the feasibility of a project by analyzing elements such as Ponzi-style fraud.
In addition, while considering new virtual currencies, the policy will consider other crypto-related vices such as the possibility of money laundering, as well as feedback from outside experts. If there is a high danger of money laundering, or if unusual additional issuance is not related to the whitepaper and project paperwork, the exchanges will take action.
The body will also be in charge of investor education, with exchange users being compelled to go through instructional material before purchasing any digital asset. All crypto investment adverts will be accompanied by warnings in order to protect consumers.
In the immediate aftermath of the Terra incident, South Korean authorities pushed to organize a committee focused on rigorous crypto regulation.
As written by Niranjan Duguta and edited by Ini Abasi Ekanem
Anypad is a next-generation blockchain Incubator and accelerator platform building a Multi-chain LaunchPad, Multi-chain AMM DEX, and Blockchain Game, Star Strike. Anypad would give crypto & blockchain startups & investors the best experience as the industry gains full-scale global adoption. Anypad is dedicated to incubating and accelerating the best and most innovative micro-cap blockchain projects, allowing blockchain startups to grow and raise funds seamlessly.