Korean cryptocurrency exchanges unveil self-regulation guidelines
From 1 May, many Korean exchanges will get voluntary inspections from the Korea Blockchain Association.
South Korea's cryptocurrency exchanges have settled on some rules for the self-regulating cryptocurrency system, Korea Times reports. The move towards self-regulation comes after South Korea backed away from top-down regulations, and switched towards a cryptocurrency normalisation approach.
The new rules were presented by 14 different exchanges on behalf of the Korea Blockchain Association. The proposals are that South Korea's domestic cryptocurrency exchanges:
- Manage client funds and their own funds separately.
- Address abnormal transactions promptly.
- Look for ways to enhance user protection.
- Hold a minimum equity of 2 billion won (about US$1.85 million).
- Publish regular audit and finance reports.
These would be checked for compliance by the association, which will also look into member company's systems to check for any loopholes that could be used for insider trading, price manipulation or money laundering.
According to an Association representative, the details aren't set in stone yet. Advance notice of ICOs is, among other ideas, one of the rules left unsettled.
"The rules are basic requirements to ensure transparent crypto transactions," said an Association official. "We will come up with more measures to bring order to the chaotic cryptocurrency market and to protect clients better."
Members are required to submit self-inspection reports to the association by 8 May, while inspection of members by the Association will start from 1 May.
Self-regulating cryptocurrency bodies have sprung up in many countries, in the absence of official guidelines or regulatory bodies. While they don't carry official weight, they are intended to serve as a way for consumers to identify the more reputable and compliant exchanges.
The close Australian equivalent is the Australian Digital Commerce Association (ADCA), which has laid down similar rules for its members to voluntarily comply with, and optionally undergo third party audits to prove it.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO