South Korean Exchanges Vow to Safeguard Altcoin Trading Amid New Regulations, Here’s Everything

The South Korean cryptocurrency market is poised for significant changes as new investor protection regulations are set to go into effect. The country, known for its vibrant altcoin trading scene, is set to implement the Virtual Asset User Protection Act on July 19. The upcoming regulation has sparked widespread discussion in the cryptocurrency community about its potential impact on digital asset trading.

South Korea holds a significant position in the global cryptocurrency market, with the Korean won recently overtaking the US dollar as the most commonly used currency for crypto trading. Around 10% of the country’s population has exposure to the digital asset, with smaller coins accounting for the majority of trading rather than market leader Bitcoin.

Stock exchanges’ response to new regulations

In response to the upcoming regulations, South Korean cryptocurrency exchanges are taking proactive steps. The Digital Asset Exchange Alliance, an industry trade body, announced plans to review 1,333 altcoins over the next six months. The review is aimed at ensuring compliance with the new Virtual Asset User Protection law and fends off concerns that the regulations could quickly stifle speculative trading in smaller digital assets.

The alliance said immediate “mass delistings are unlikely” due to the extended evaluation period. Additionally, all new token listings will be evaluated against the new law once it comes into effect. This prudent approach suggests a gradual implementation of the law, rather than a sudden market shift.

The new regulations were prompted in part by the 2022 collapse of the Luna and TerraUSD tokens, created by South Korean entrepreneur Do Kwon, which resulted in losses exceeding $40 billion. While the law is intended to protect investors, it could increase operating costs for exchanges like Upbit, one of the world’s top cryptocurrency trading platforms. The development illustrates the ongoing balance between protecting investors and maintaining a vibrant cryptocurrency trading culture in South Korea, particularly for altcoins.

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Legal Developments in the Korean Crypto Space

In a significant legal development, the Seoul High Court overturned a previous ruling in a dispute involving the Fantom Foundation, a major blockchain platform. The court dismissed all of SikSin and Ahn’s claims against Fantom, reversing an earlier decision that awarded the plaintiffs over 198 million FTM tokens.

The case concerned agreements to implement Fantom technology in the South Korean food industry. The Supreme Court ruled that SikSin and Ahn had failed to fulfill their contractual obligations, including failure to integrate Fantom technology and create a workable technical document for the Lachesis protocol. The court also noted evidence of plagiarism in the plaintiff’s work.

Fantom CEO Michael Kong welcomed the decision, while the company’s legal team stressed the complexity of the case. The ruling is expected to impact how blockchain-related disputes are handled in the South Korean legal system, especially those involving cross-industry applications and intellectual property issues. It sets a precedent for future cases at the rapidly evolving intersection of blockchain technology and traditional industries.

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