Korea’s FSC Orders Crypto Exchanges to Delist and Classify Security Tokens

• South Korea’s Financial Services Commission (FSC) has instructed five major crypto exchanges in the country to delist and classify digital assets that have similar properties to that of securities.
• Crypto exchanges have until February 9th to submit their feedback to the regulator.
• The DAXA – a crypto exchange group representing South Korea’s largest firms like Upbit, Bithumb, Coinone, Korbit, and Gopax – will be tasked with collecting the necessary feedback from each company through the transaction support division and delivering them to the regulator.

South Korea’s Regulations on Digital Assets

Korea is looking to amp up regulations to prevent unfair trade in its cryptocurrency industry. As such, the Financial Services Commission has issued instructions to five major crypto exchanges in the country to delist and classify digital assets that have similar properties to that of securities.

The Implosion of Terra Ecosystem Tokens

The implosion of the once-prominent Terra ecosystem tokens was the first domino to fall in an ensuing series of other high-profile collapses. The subsequent failure of hedge fund Three Arrows Capital (3AC) and a slew of bankrupted exchanges and lenders such as Celsius Network, Voyager Digital, Genesis, and FTX greatly impacted the South Korean market. This led regulators in the country to call for setting up comprehensive crypto regulations for investor protection.

FSC’s Order

According to local media reports, the FSC stated that many tokens listed and traded on existing crypto exchanges could be delisted or transferred to securities companies if proper guidelines were issued. The DAXA – a crypto exchange group representing South Korea’s largest firms like Upbit, Bithumb, Coinone, Korbit, and Gopax – will be tasked with collecting feedback from each company through transaction support division by February 9th deadline.

Effects on Cryptocurrency Exchanges

Crypto exchanges must adhere with this order before February 9th if they wish not face any legal consequences from regulators themselves.. Furthermore investors must take extra caution when trading digital assets as it can lead them into financial loss due stringent regulations imposed by government authorities like FSC itself.

Conclusion

While this development may seem overwhelming initially it is part of efforts taken by government authorities in order protect investors from fraudulent activities happening within cryptocurrency space while allowing legitimate players exist within framework set by respective governments