South Korea’s Financial Services Commission has asked crypto exchanges to provide a list of recently delisted altcoins in order to conduct a market valuation and understand the nature of the risks involved.
The South Korean financial regulator, the Financial Services Commission (FSC), has asked the exchanges for a list of recently delisted altcoins, according to local media reports. Specifically, she wants stock exchanges to delete assets that she believes pose high investment risks.
Delisted crypto assets
The FSC reportedly sent a notice to 20 exchanges on June 14, asking them to complete the list by June 16. One exchange, Upbit, hit 30 altcoins by either removing them or labeling them as “significant items” on June 11, the media report said.
The FSC reportedly wants this list to understand market trends, with the assets being removed making it difficult to understand the risk of such assets. Upbit stated that the assets were removed or re-listed because they did not meet internal standards.
There’s no indication that this is a consequence of the recent announcement, but South Korean officials have stepped up their scrutiny of the crypto market. Actions taken by the FSC include asking exchanges to apply for a new license after new regulatory guidelines for exchanges were issued. Exchanges that do this are considered fully regulated, but there has been some backlash to these new rules.
In addition, the country imposes a 20% tax on the asset class, which, while gladly accepted by the majority of the public, is seen by some to be too demanding. In addition to banning privacy coins, the country is clearly trying to ensure that no harm is done to the public, either directly from illegal activities or from investor risk.
The FSC last published a special guideline on June 17th that contains several specific requirements. This includes dealing with cryptocurrencies that are issued by himself or by special interest groups and the prohibition of employees from trading on relevant exchanges.
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Is the crackdown starting?
South Korea is far from the only one, although it is one of the most active when it comes to reviewing the crypto market. The Thai SEC recently banned meme coins, exchange tokens and NFTs, stating that these tokens pose too high a risk for investors.
In practice, these bans can be difficult to fully enforce as they can only be aimed at centralized exchanges. Decentralized exchanges continue to enjoy great popularity as efficiency gains and trading costs make them an increasingly attractive choice.
The United States, which many countries are looking to as an example, has signaled its intention to create a more specialized framework for the marketplace. The Biden government is reportedly working on it while Senator Elizabeth Warren said cryptocurrencies failed to keep their promise. Senator Warren also spoke favorably of CBDCs at the hearing, suggesting that the US could soon announce the introduction of a blockchain-based currency.