Introduction of New Regulatory Framework

Starting from July, virtual asset exchanges will collectively assess the continued listing of approximately 600 virtual asset types currently being traded, as the Act on the Protection of Virtual Asset Users comes into effect. Subsequent listing maintenance reviews will occur quarterly. Any problematic assets will be designated as cautionary trading items and delisted accordingly.

Guidelines for Virtual Asset Trading

Financial authorities plan to finalize exemplary guidelines for virtual asset trading support based on these principles, intending to implement them across all exchanges concurrently with the enactment of the Act on the Protection of Virtual Asset Users on July 19. This will require the 29 virtual asset exchanges reported to financial authorities, including Upbit, Bithumb, Coinone, Korbit, and GOPAX, to conduct an initial review to determine whether to maintain the listing or transaction support for the 600 virtual asset items currently being traded.

Assessment Criteria and Review Process

Each exchange must establish a mandatory review and decision-making body for trading support, which assesses criteria such as the issuer's credibility, user protection measures, technology and security, and compliance with regulations. Additionally, the assessment includes capacity and social credit of entities involved in issuance, operation, and development, along with past business history. It also covers disclosure of critical virtual asset-related information, potential for involvement of virtual asset holders in decision-making, transparency in virtual asset operations, total issuance and circulation volume, appropriateness of market capitalization and virtual asset distribution, potential conflicts of interest between virtual asset holders, potential conflicts and resolution strategies between exchanges and users, as well as the security of distributed ledgers and virtual assets and the existence of concentrated risks in distributed ledgers.

Alternative Assessment Methods

Alternative assessment methods are being introduced to prevent issues where coins such as Bitcoin, which do not have a specific issuer, or coins issued by decentralized autonomous organizations (DAOs), fail to meet assessment criteria and consequently encounter trading difficulties in the domestic market. Plans are underway to ease specific assessment criteria for virtual assets that meet alternative assessment requirements. This applies particularly to virtual assets that have been traded normally for over two years in qualified overseas markets such as the United States, United Kingdom, France, Germany, Japan, Hong Kong, Singapore, India, and Australia, where robust regulatory frameworks are in place. Additionally, exchanges are prohibited from accepting any financial benefit or compensation of value in exchange for transaction support.