Seoul, Republic of Korea - New guidelines, known as “Visual Asset Operation Risk Evaluation,” recently issued by the Korea Federation of Banks to commercial banks, include rules for evaluating the creditworthiness of listed coins. Exchanges with low-creditworthy trading pairs will be considered high-risk as part of the new rules. —
The guidelines address the total number of virtual assets listed on an exchange, the trading volume of each coin, and the presence of low-creditworthy coins. Issuing a real-name account is important for the successful operation of a virtual asset trading site. Banks are accordingly setting standards for issuing real-name accounts.
Establishing standards for listed assets is meant to decentralize the exchange’s authority to list new coins. Exchanges have enjoyed a monopoly in a regulatory blind spot, which will be mitigated by audits from banks and third parties.
The Korean securities market requires companies seeking listing to apply for a pre-listing examination by sharing information on the following: auditor designation, selection of a management company, organisation of the corporate system, development of the internal control system, and obligatory share vesting procedure.
The KRX Korea Exchange listing team will start their listing investigations based on documents received from the auditor and management company. Input from third-party agencies that are not connected to the trading platform nor the pre-listing company will help prevent accounting issues caused by coin listings.
Korean crypto exchanges have been requiring listed projects to provide the following: project information, business strategy, token structure and issuance plan, overall project development plan, and the presence of a third-party company. The South Korean crypto market is expected to introduce an independent third-party auditing system.
James Kim, co-founder and co-CEO of CrossAngle, said, "Currently, the Korean authorities are not directly regulating the crypto industry, but are embarking on indirect regulation through commercial banks. Therefore, it seems that they have given exchanges the responsibility of ensuring that the coins they list have credibility and business value to protect investors.”
Because the guidelines are not from the Financial Services Commission, however, they will not be enforced by regulatory authorities.
Since these thin guidelines are the only ones issued so far before the Act-On Reporting and Using Specified Financial Transaction Information comes into full effect in September, they are unlikely to change the main course of said Act.
Xangle has been tackling information asymmetry in the crypto-asset industry with its disclosure issuance platform since 2018. The platform collects the widest scope of project-related on-chain and off-chain information, verifies it, and displays it all in one place as disclosures, or announcements. With Xangle, traders and investors gain unparalleled access to all-inclusive real-time information that they need from over 2,000 crypto assets. Xangle legitimizes the crypto assets industry in the eyes of government regulators, those in the traditional finance sector, and the general public. The Xangle platform directly promotes transparency, which dismantles the barrier of understanding between projects and investors, and allows projects to progress at the pace they feel is best.
Release ID: 89025524