South Korea Introduced New self-Regulatory Standards; What’s New?

South Korea's Strides in Cryptocurrency Regulation

South Korea, a country looking to develop a two-part crypto regulatory framework finally reached a destination. On June 2, 2024, the country’s 20 crypto exchanges announced its new self-regulatory standards.

The new regulations will come into effect on July 19 and entail a reexamination of over 1,300 cryptocurrencies already being traded on domestic platforms.

Source: X

The evaluation is designed to align with the recently enacted Virtual Asset User Protection legislation, addressing worries that the rules may overly restrict speculative activity in less prominent cryptocurrencies. Additionally, any tokens failing to satisfy the established standards will be excluded from trading.

The strict criteria, which benchmark the trustworthiness of issuers, the safeguarding of investors, security protocols, and regulatory adherence, are fixed and subject to quarterly reassessment. Furthermore, the regulations compel domestic trading platforms to form a separate authoritative committee to oversee the token listing process, ensuring that all significant listing and delisting activities conform to the updated regulations.

South Korea is set to enforce stringent cryptocurrency regulations, with severe penalties including potential life sentences for serious infractions. The nation's Financial Services Commission (FSC) declared in February 2024 that those engaging in unlawful cryptocurrency activities might be subject to harsh legal consequences starting July 19, when the new regulations take effect.

According to a statement released by the FSC on Wednesday, breaches of the forthcoming legislation could result in a minimum of one year in prison or monetary penalties of three to five times the illicitly acquired profits. For offenses resulting in gains exceeding 5 Billion Korean won (equivalent to $3.76 Million), the hackers could be sentenced to life imprisonment or fined an amount twice that of their illegal earnings.

Where South Korea Stands in the Crypto Space? 

In the initial months of 2024, the country outpaced the US dollar as the leading currency for cryptocurrency transactions worldwide. Upbit, South Korea's premier exchange, has occasionally been listed among the world's top five exchanges in terms of trade volume.

This information showcases the nation's significant influence in the cryptocurrency sector. Data from Chainalysis reveals that in 2023, the US was at the forefront of crypto earnings, amassing approximately $9.36 billion, while South Korea ranked eighth with crypto-related gains of around $1.04 Billion.

Source: Chainalysis

A Statista analysis anticipates that by 2024, South Korea's income from the cryptocurrency market could reach $1.8 Billion, with potential growth to more than $2.2 Billion by 2028. Additionally, the number of cryptocurrency users in the country is expected to surge, potentially reaching 12.02 Million by 2028.

Conclusion 

South Korea is all prepared to take decisive steps in the cryptocurrency domain with its new self-regulatory standards, aligning with the Virtual Asset User Protection law. These measures are set to reinforce the market's integrity and investor security. The new regulations will secure investors and traders from illicit acts.  

Also Read: South Korea Seeks Collaboration with US on Crypto Re