Korean Regulators To Scrutinize Crypto Assets Before Exchanges Can List Them
The financial regulators in South Korea have announced their decision to preside over cryptocurrency listing on exchanges in the country. The action was a prompt measure to deter cases like the recent WEMIX token delisting from recurring.
In most countries that encourage crypto activities, such as South Korea, a crypto exchange solely manages the listing and delisting procedures of crypto assets on its platform. However, regulators believe the strategies most exchanges adopt pose more significant investment risks to customers.
Recently, the association of crypto exchanges alleged that Wemade.co was not being transparent and delisted its native token, WEMIX, from top crypto exchanges in South Korea. This adverse action reportedly provoked the country’s regulators to seek oversight functions on crypto listings instead of leaving it solely to the discretion of exchanges.
According to the reports, Korean regulators are working on creating a regulatory framework that would guide the conduct of cryptocurrency listing on local exchanges. In addition, the regulators would mandate crypto firms to seek their approval before listing any virtual assets on their platforms.
Furthermore, it was reported that regulators are still debating whether to include the new proposal in their upcoming crypto regulatory framework, Digital Asset Basic Act. Also, the Korean regulators plan to emulate Japan’s strict crypto regulation, requiring local exchanges to seek approval from JVCEA before listing any digital asset.
The Japan Virtual and Crypto asset Exchange Association JVCEA is the body that controls and examines digital assets listed on crypto platforms in the country. Recently, the body announced plans to review its stringent procedures on crypto listings to accommodate more crypto assets on the local exchanges in the country.
Currently, there are about 50 cryptocurrencies that are listed on Japan’s local crypto exchanges, whereas there are about 1000 crypto assets on South Korean exchanges. However, the country will remove crypto tokens like WEMIX over a lack of transparency from its issuers.
The Recent WEMIX Token Delisting Saga
In November, the association of crypto exchanges in South Korea supported the delisting of WEMIX on the top four crypto exchanges in the country. In addition, they accused Wemade.co, a Metaverse project that issued WEMIX tokens, of reporting false data on the quantities of tokens it has in circulation.
Wemade sued the association in a South Korean court, stating they had no practical reason for delisting its token. However, the court dismissed the case and approved the association’s actions.
Consequently, the delisted token rapidly declined by 90% in value. Currently, the trading price is $0.13 after dropping drastically from $1.55.
Also, the exchange has lost most of its market cap value, declining to an all-time low of $46 million. Many investors lost their funds and investment due to this massive price decline.
This incident urged the South Korean regulators to take over crypto listings to prevent such occurrences in the future.
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