South Korea is planning to introduce stricter regulations for token listing on exchanges in an effort to protect investors and prevent hacking incidents. The Financial Supervisory Service has been working on these listing guidelines since last year and is expected to release them by the end of the month or early next month. The guidelines will prohibit tokens that have been hacked from being listed on exchanges unless the issue has been resolved and damages recovered.
The upcoming guidelines will also require virtual assets with a history of hacking or security incidents to provide an explanation of the incident and recover any damages before they can be listed. Several hacking incidents in recent months have targeted domestic virtual asset projects, leading to the compromise of coins such as Galaxia, Orbit Chain, Somesing, and Play Dapp. DAXA-affiliated exchanges delisted these coins for failing to properly address the hacking incidents. Future relisting for assets that have been hacked may not be possible without clear identification and resolution of the causes.
In addition to the restrictions on listing hacked tokens, the guidelines will require overseas virtual assets to provide a white paper or technical manual for domestic use before they can be listed. An exception provision has been included for virtual assets traded on overseas exchanges for more than two years, allowing certain criteria in the listing guidelines to be skipped. The guidelines also outline standards for delisting, such as compliance with disclosure obligations and accurate distribution volume announcements.
While the contents of the listing guidelines have been finalized, the exact announcement schedule is not yet clear. In a recent radio interview, Lee Bok-hyun, the governor of the Financial Supervisory Service, mentioned that authorities are discussing the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the country. With the general election approaching, South Korea’s rival political parties are competing for support from crypto investors, outlining their policy proposals to institutionalize crypto-assets with different approaches.
Overall, South Korea is taking steps to implement stricter regulations for token listing on exchanges to ensure investor protection and prevent hacking incidents. The upcoming guidelines will prohibit tokens that have been hacked from being listed without resolution and recovery of damages. Overseas virtual assets will also need to provide documentation for domestic use before they can be listed, with certain exceptions for assets traded on overseas exchanges for more than two years. The guidelines also outline standards for delisting, such as compliance with disclosure obligations and accurate distribution volume announcements.
