South Korean crypto exchanges, under the Digital Asset Exchange Alliance (DAXA), have unveiled new guidelines seeking to avert mass delistings ahead of upcoming legislation aimed at curbing market manipulation.
The guidelines standardize criteria for supporting and terminating digital asset trading on exchange platforms, DAXA said in a statement on Tuesday.
Some 1,333 existing digital assets will be reviewed over six months to ensure a systematic approach, the alliance said. DAXA, a consortium of major South Korean cryptocurrency exchanges, said it will collaborate with financial authorities and experts in a bid to refine their standards.
The hope is that further transparency will lead to greater compliance, reducing the risk of assets being pulled from exchanges.
"Domestic major exchanges have been applying key criteria of the best practices pre-emptively since late 2023," a rough Google translation of DAXA’s statement reads. “Thus, the likelihood of large-scale delistings occurring all at once is low."
Specifically, the guidelines focus on transparency in information disclosure and prohibit fees for trading support, meaning exchanges are not allowed to charge any form of payment or receive kickbacks for listing tokens unless expressly stated otherwise.
Key aspects also include comprehensive review criteria covering issuer credibility, user protection measures, technology and security standards, and regulatory compliance.
Exchanges are required to provide essential information, such as white papers and important announcements from issuers, the statement reads.
User protection measures, meanwhile, include issuing termination notices and providing grace periods for users to manage their assets.
It comes ahead of the country’s forthcoming "Virtual Asset User Protection Act," set to take effect on July 19.
Enacted in response to the fallout from the collapse of FTX, the act mandates stricter controls and standardized practices across exchanges to prevent market manipulation and protect investors.