Five Major Cryptocurrency Exchanges Form Joint Council... Apply Common Standards for Listing and Delisting

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[Asia Economy Reporter Lee Jung-yoon] The top five domestic cryptocurrency exchanges have decided to form a joint consultative body to prevent recurrence, establish market order, and protect investors following the Luna crash incident.

The five major exchanges?Upbit, Bithumb, Coinone, Korbit, and Gopax?announced the "Joint Voluntary Improvement Plan for Virtual Asset Operators" at an emergency inspection meeting between the ruling party and government held at the National Assembly on the 13th to restore fairness in the virtual asset market and protect investors.

First, the exchanges will immediately form a joint consultative body for virtual asset operators. They will prepare common improvement measures to protect investors from listing to the termination of trading support, and establish a system that can convene emergency meetings through a hotline and respond jointly within 24 hours if any abnormal signs occur. In the event of an emergency like the recent Luna incident, they plan to resolve market confusion by delivering agreed information to investors through joint responses such as deposit and withdrawal policies. They will also establish and operate policies such as investor protection education and review bills for the establishment of a basic virtual asset law.

The consultative body will include CEOs and relevant staff from the five major exchanges. It will be divided into three sectors: trading support (listing), market monitoring, and compliance monitoring, and will gather expert opinions on each sector through seminars and overseas case studies.

Furthermore, starting from October, the exchanges will prepare and commonly apply strengthened regulatory measures covering all stages from trading support, distribution (trading), to trading termination (delisting). The listing review guidelines will be prepared focusing on the minimum common evaluation items that exchanges should consider. Previously, evaluations were mainly based on technical efficiency, but now project feasibility and other factors will also be included.

They will also introduce a common virtual asset alert system. Through this, if there is a sudden fluctuation in the liquidity or price of a specific cryptocurrency, or if the trading ratio of a small number of accounts is high within a short period, raising concerns about market order disruption, an investment caution alert will be issued. For the affected assets, a separate notation will be displayed on the trading window, and programmatic automated trading will be blocked.

In addition, they plan to jointly respond to create a sound investment environment. From October, whitepapers and evaluation reports on cryptocurrencies will be provided to reduce information asymmetry and improve accessibility. When advertising on the internet or elsewhere, exchanges will insert investment warning phrases to raise awareness of risks and display such phrases even for large investments. Moreover, from January 2023, educational videos related to cryptocurrency investment will be produced, and mandatory viewing will be required to enable trading.

Previously, the price of TerraUSD (UST), a stablecoin designed to be pegged to 1 dollar, plummeted, causing the price of its sister coin Luna to fall sharply, resulting in a major crash. At that time, exchanges were criticized for failing to respond properly, which exacerbated the damage.

Voices calling for the enactment of a basic law related to cryptocurrencies were also raised that day. Sung Il-jong, Policy Committee Chairman of the People Power Party, said, "We are thinking of enacting a basic law for platforms based on blockchain," adding, "There are parts in the Special Financial Transactions Information Act (Special Act on Reporting and Using Specified Financial Transaction Information), but things are not well organized, so we will create a basic law for blockchain platforms to support the Fourth Industrial Revolution era."

Yoon Jae-ok, a member of the People Power Party, also said, "When the problem first arose, there were concerns about delays because the responsible ministry was not designated, and even afterward, the responsibility was not clearly organized," adding, "We will quickly decide on the specific direction of the basic law."

This content was produced with the assistance of AI translation services.