In a bid to address the issues relating to money laundering, insider trading, and other illicit activities, South Korean cryptocurrency exchanges have announced self-made rules, The Korea Times reported.
The 14 crypto exchanges, who are also the members of the Korea Blockchain Association (KBA), announced the new rules at a press conference in Seoul on Tuesday. These include Bithumb, Upbit, and OKCoin among others.
In order to ensure compliance with the new rules, the crypto exchanges will have to manage clients' digital coins and their own separately; deal with abnormal transactions quickly; float new crypto with improved client protection system; hold a minimum equity of 2 billion won; and regularly publish audit and finance reports.
The KBA will inspect the 14 exchanges and 9 new entrants to assess whether their systems adhere to the new rules. It will also check if there are any shortcomings in the current systems that could be exploited for insider trading, price rigging, and money laundering.
While the initiative is positive step to boost trust on the domestic cryptocurrency ecosystem, it might have a limited impact as the rules are not legally binding.
"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."
The KBA said that the members have not yet reached a consensus on rules regarding initial coin offerings (ICO).
The KBA will begin its inspection from May 1 and member exchanges are supposed to submit their self-assessment reports by May 8.
