South Korean Crypto Exchanges Not Allowed To Handle Self-Issued Coins
Wallet tokens are under the control of South Korean regulatory authorities.
The increased regulatory control affecting South Korea's cryptocurrency space recently appears to have expanded to include exchange tokens.
Exchange tokens are tokens issued by a cryptocurrency exchange that generally provide some benefit to the holder, whether through reduced trading fees, regular token burns, or other means.
According to an Arirang report released on Thursday, cryptocurrency exchanges are prohibited from handling self-issued coins or assets. The law also extends to all assets spent by family members, spouses or distant relatives and is expected to come into force on June 26.
Businesses that do not comply with the new regulations can go out of business and face fines of up to $ 88,000.
South Korea's Financial Intelligence Unit (FIU) recently contacted 33 cryptocurrency trading platforms to inform them of an upcoming field consultation no later than September 24. Over the next week, a Korean exchange, Upbit, wrote off a handful of coins and issued stern investment warnings for an additional 25 assets, representing 14% of all publicly traded coins.
Going forward, Upbit will no longer accept incoming deposits for the 25 coins mentioned in the disclaimer and has announced that it will continue to review assets to decide whether or not to remove them from the list. The deadline for the final token decision is Friday, June 18.
Related: Korean Banks Must Classify Cryptocurrency Exchange Customers As 'High Risk'
South Korea's attempts to gain greater control over the cryptocurrency industry within its borders have led regulators to demand certificates for the information security management system of crypto trading platforms. , which essentially act as a business license. Out of 20 exchanges with the certificate, 11 have already removed tokens from the list or issued warnings similar to those of Upbit.
Since many exchange tokens do not run on a proprietary blockchain, the legal definition of what it means to "manage" the tokens issued by an exchange could expand in the days and weeks to come as the purge of plays continues in South Korea.
