14 cryptocurrency exchanges kick off self-regulation
[THE INVESTOR] The Korea Blockchain Association on April 17 said 14 local cryptocurrency exchanges are signatories to its new self-regulatory measures.
They include Upbit, Bithumb, Gopax, Korbit, Coinone and two Chinese exchanges OKCoin and Huobi. Nine other member exchanges are also poised to join.
The association, composed of 23 local exchanges, announced the measures four months after the first draft was unveiled in December. Assessment results will be announced in June.
“We are creating our own rules,” Jeon Ha-jin, chairman of the self-regulatory committee of the association, told reporters in Seoul. “They are expected to help create a healthy ecosystem where traders are protected and exchanges play an essential role in developing the blockchain industry.”
Jeon Ha-jin, chairman of the self-regulatory committee of the Korea Blockchain Association
The guidelines include a set of anti-money laundering rules. The exchanges are also mandated to install systems that detect irregularities or unusual trading activities.
For the exchanges listing new coins, they are required to have an internal listing committee and set evaluation criteria. Disclosing a white paper of the coins and the price -- if available -- are also mandated.
In addition to having more than 2 billion won (US$1.87 million) in assets, the exchanges have to submit a financial statement, audit report and list of shareholders to the association.
Following is the Q&A during the news conference.
Q: More and more foreign exchanges are coming to Korea. Do you have ways to separately regulate these exchanges?
A: Many are concerned about such issues. What we can say for now is that we will carefully review them to reduce risks.
Q: There are more than 100 exchanges in Korea. Do you plan to have all of them onboard?
A: Those that pass the new rules will be verifying its qualifications. Our goal is for traders to be able to differentiate between the exchanges with better standards and those that don’t.
Q: How often are you planning to monitor the self-regulatory measures?
A: We are planning on regular, annual evaluations. Those who don’t pass the review cannot become a member. Also, their membership could be forfeited in the future if they don’t meet the qualifications.
Q: What’s the association’s stance on ICOs? Are you planning to have guidelines?
A: We are planning them as the government’s ambiguous stance on ICOs has driven Korean firms overseas. It’s unfortunate to lose this great opportunity for growth.
Q: In December, the association vowed to halt new coin listings. But many exchanges are currently introducing new coins. Have you had a change of mind?
A: At the time, we put off the listings to help control speculations. But it seems like the cryptocurrency market has become more stable, and we think it’s okay for exchanges to add new coins after checking their background.
Q: Some exchanges are still unable to operate here because the banks have been refusing to issue new real-name accounts. If they abide by the new rules, will they be able to obtain the banking sector approval?
A: We haven’t talked with the banks yet. But when the cryptocurrency exchanges abide by these voluntary measures to ensure transparency and security, we are planning to ask them.
By Ahn Sung-mi (firstname.lastname@example.org)