Cryptocurrency exchanges in South Korea have set up rules to lift and increase transparency of deals and reduce money laundering, terrorism financing, insider trading and many other deals that have slowed down the growth of blockchain technology in the country. This group of exchange platform include the likes of Upbit, OkCoin, Bithumb, among others.
The Korean Blockchain Association started considering the development of a self-regulatory framework for the domestic cryptocurrency exchanges back in February 2018.
According to Korean Times, the local media reports, the Korean Blockchain Association (KBA) Cryptocurrency framework has been announced on Tuesday 17th this month by the executive of the organisation, Jeon Ha-jin during a press conference at the Korean Federation of Small and Medium Business (SME) in Seoul.
The newly established KBA self-regulatory framework consists of the measures that are majorly focusing on consumer protection.
The framework constitutes five general requirements that include the management of clients' coins, holding a minimum equity of 2 billion won, cope with abnormal transactions quickly, float new crypto with enhanced client protection system and that the cryptocurrency exchanges will need to publish proper consistent audit and finance.
The association will go further to visit and look into member companies' systems to carry out checks if there are loopholes for companies to exploit that could be used for inside trading, money laundering and price rigging though its members had not yet come to a common ground through consensus on an advanced notice of Initial Coin Offerings (ICO).
The association will have to determine if these cryptocurrency exchanges meet the newly set rules. Apart from 14 members, a total of nine other companies are looking to adhere and comply with these new guidelines. Since none of the rules are legally binding, it remains to determined how all of this pans out exactly. Under the newly established guidelines, these exchanges should not see much of change compared to how they handle things currently.
The South Korean financial regulatory body, Financial Services Commission (FSC) last week informed the public that it would look into three domestic banks that provide services to crypto exchanges in the country in order to check the compliance of these exchanges with the latest country's anti-anonymity regulations.
The South Korean financial markets regulator, the Fair Trade Commission (FTC) early this month also ordered 12 of the Korean crypto exchanges to review their user agreements.
The KBA official said that "there are issues left unsettled. The rules are basic requirements to ensure transparent cryptocurrency transactions. We will come up with more measures to bring order to the chaotic cryptocurrency market and to protect clients better." All members of this association are supposed to submit self-inspection reports to the association by May 8 but the association will start its inspection as early as May 1.