The Financial Services Commission of South Korea has asked crypto exchanges to provide a list of recently delisted altcoins to conduct a market assessment and understand the nature of the risks involved.
South Korea’s financial regulator, the Financial Services Commission (FSC), has asked exchanges for a list of recently delisted altcoins, according to reports from local media outlets. Specifically, it wants exchanges to delist assets that it deems as having high investment risks.
Delisted crypto assets
The FSC reportedly sent a notice to 20 exchanges on June 14, asking them for the list by June 16. One exchange, Upbit, affected 30 altcoins by either removing them or designating them as “significant items” on June 11, according to the media report.
The FSC purportedly wants this list to understand market trends, with the removed assets making it difficult to understand the risk of assets such as these. Upbit stated that the assets were removed or listed differently because it did not meet internal standards.
There is no indication whether this is a consequence of the recent notice, but South Korean officials have been ramping up their scrutiny of the crypto market. Actions taken by the FSC include asking exchanges to apply for a new license, after issuing new regulatory guidelines for exchanges. Exchanges that do so will be considered fully regulated, but there has been some backlash to these new rules.
Additionally, the country is also imposing a 20% tax on the asset class, which while the majority of the public is happy to accept, some consider to be too demanding. On top of banning privacy coins, the country is clearly looking to ensure that no harm comes to the public, either directly through illicit activity or through investor risk.
The FSC most recently published a special directive on June 17, issuing several specific requirements. These include not dealing with cryptocurrencies issued by itself or special stakeholders, prohibiting employees from trading through relevant exchanges.
Is the crackdown beginning?
South Korea is far from the only one, though 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 much risk for investors.
In practice, these bans may be hard to enforce completely, as they can only really target centralized exchanges. Decentralized exchanges continue to be popular, with improvements in efficiency and trading costs making them an increasingly more attractive choice.
The United States, which many countries are looking to as an example, has signaled its intention to come up with a more specialized framework for the market. The Biden administration is reportedly working on this, while Senator Elizabeth Warren has said that cryptocurrencies have failed to live up to their promise. Senator Warren, in the hearing on the matter, also spoke positively of CBDCs, hinting that the US may soon announce the launch of a blockchain-based currency.