Crypto exchanges have until February 9th to provide the regulator with input.
South Korea is attempting to tighten laws to avoid unfair commerce in the sector. As a result, the Financial Services Commission directed the country’s five major crypto exchanges to delist and categorize digital assets that resemble securities.
The collapse of the once-dominant Terra ecosystem tokens was the first domino to fall in a sequence of other high-profile failures. The following bankruptcy of hedge fund Three Arrows Capital (3AC), as well as a wave of insolvent exchanges and lenders like Celsius Network, Voyager Digital, Genesis, and FTX, had a significant influence on the South Korean market.
As a result, the country’s officials have advocated establishing comprehensive crypto legislation to safeguard investors.
According to a local media source, the FSC indicated that if adequate rules were established, many tokens listed and traded on existing crypto exchanges might be delisted or transferred to securities organizations.
The DAXA, a crypto exchange organization comprised of South Korea’s top enterprises such as Upbit, Bithumb, Coinone, Korbit, and Gopax, will be entrusted with gathering and sending the essential input from each company via the transaction support section to the regulator. The submission deadline is February 9th.
The FSC emphasized the need to modernize the regulatory framework on “the issue and distribution of fractional investment goods and digital asset securities (security tokens)” while unveiling the “Work Plan” for the year.
South Korea’s Ministry of Justice has unveiled its intentions to create a crypto-tracking system called the Virtual Currency Tracking System to combat money laundering schemes and reclaim cash associated with illegal activity. The country primarily intends to monitor transaction history, retrieve transaction-related data, and verify the source of money before and after the remittance.
It is expected to be operational in the first half of 2023. According to the South Korean government, the development of the tracking and analyzing system would begin in the second part of the year.
The news comes as the Korean police agency has signed multiple partnerships with various local exchanges to combat blockchain crimes. In addition, the police agency has expanded the number of blockchain security specialists on its payroll to bolster its investigations.