Crypto Industry in South Korea Adapts to Regulations, No Mass Delistings Expected
The South Korean cryptocurrency industry is facing a period of adjustment as new regulations come into effect, but fears of widespread token delistings appear to be overblown.
According to the Korea Blockchain Enterprise Promotion Association (KBEPA), a major crypto industry group in the country, mass delistings of cryptocurrencies from exchanges are unlikely to occur. This assessment comes in response to concerns raised after the implementation of new laws aimed at regulating the crypto sector.
The new regulations, which took effect on July 1, 2024, require cryptocurrency exchanges to conduct stringent risk assessments for the tokens they list. These assessments must be carried out every quarter, evaluating factors such as the token’s legal status, technological risks, and the financial stability of its issuer.
Despite the increased regulatory scrutiny, the KBEPA believes that most tokens currently listed on South Korean exchanges will be able to meet the new requirements. The association’s statement suggests that the industry is adapting to the regulatory changes rather than facing a dramatic reduction in available cryptocurrencies.
This development is significant for the South Korean crypto market, which has been a major player in the global cryptocurrency ecosystem. The country’s approach to regulation has been closely watched by other nations and industry participants worldwide.
While some adjustments may be necessary, the KBEPA’s assessment indicates that the new regulations are not expected to cause major disruptions to the market. Instead, they may lead to a more stable and compliant crypto industry in South Korea, potentially setting a precedent for other countries considering similar regulatory measures.
The new cryptocurrency laws set to take effect in South Korea on July 19, 2024, are likely to have several significant impacts on the country’s crypto market
The Virtual Asset User Protection Act aims to safeguard crypto investors by addressing unfair trading practices and introducing essential user protection measures. This could potentially increase investor confidence in the long run.
Exchanges are required to conduct thorough reviews of listed cryptocurrencies. This could lead to the delisting of some altcoins that fail to meet the new regulatory standards. Over 1,300 cryptocurrencies are set to be re-examined, with concerns that up to 600 altcoins could potentially be delisted.
The stricter regulations may result in a more consolidated market with fewer, but more compliant, cryptocurrencies available for trading.
Major exchanges like Upbit will face higher operational costs to ensure compliance with the new regulations. This could potentially impact their profitability and services.
The introduction of these laws has already caused some price dips as investors assess the potential changes. However, some coins have shown resilience, with tokens like LayerZero and Taiko recording significant gains despite the regulatory uncertainty.
As the situation continues to evolve, market participants and regulators will be closely monitoring the impact of these new laws on the South Korean cryptocurrency landscape.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
