South Korea is set to review over 600 cryptocurrency listings on domestic exchanges in July, following the implementation of the Virtual Asset User Protection Act. This move aims to strengthen regulatory measures and ensure the reliability of listed tokens.

Regulatory Measures

The Korean financial authorities are finalizing practices for crypto listings, which will be enforced starting July 19. The regulations will apply to nearly three dozen registered crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. These exchanges will conduct initial reviews to determine whether to maintain or delist each token.

Review Criteria

Under the new regulatory framework, crypto exchanges must establish a review committee to evaluate various factors such as the reliability of the issuing entity, user protection measures, technology and security standards, regulatory compliance, issuer capabilities and reputation, past business history, information disclosure, operational transparency, total supply and circulation, market capitalization, and potential conflicts of interest between a trading platform and token holders.

Tokens Issued by DAOs and Regulated Markets

Tokens issued by decentralized autonomous organizations (DAOs) may not meet standard requirements. Tokens that have been traded normally for over two years in regulated markets such as the U.S., U.K., France, Germany, Japan, Hong Kong, Singapore, India, and Australia will be subject to a less strict review process.

Listing Restrictions and Quarterly Reviews

Crypto exchanges will be banned from accepting any payments in return for listing a token. Subsequent reviews will occur quarterly, with tokens deemed “problematic” being designated as cautionary and potentially delisted. Crypto exchanges will have a six-month period to assess whether to continue supporting existing crypto listings, followed by maintenance reviews every three months.