Befell, a South Korean crypto exchange, has been keenly reviewed by the regulators over exchange tokens. By description, “exchange tokens” are tokens issued by crypto exchanges and they attract some benefits to the holder, either through reduced trading fees, regular burns, or other means.
In a June 17 Arirang report, South Korean regulators have given a stern warning to crypto exchanges from handling any coins or assets by themselves. This policy also extends to assets issued to family members, spouses, or distant relatives and will be implemented fully from June 26.
Institution companies and businesses that fail to comply with the new regulation will attract license suspensions and face fines amounting to $88,000.
Several weeks ago, South Korea’s Financial Intelligence Unit reportedly contacted at least 33 crypto trading platforms to inform them about the forthcoming field consultations, which shall be implemented by September 24.
One week later, a Korean exchange, Upbit, allegedly effected the guidelines. It delisted several coins, and issued a stern investment warning on another 25 assets, representing 14% of all coins listed on the platform.
From now onwards, Upbit will no longer accept inbound deposits for the 25 coins mentioned in the warning and has insisted to review the assets to determine whether or not to delist them entirely. All 25 assets await their fate later this week.
The latest efforts by the South Korean authorities to streamline the crypto industry have reportedly attracted demand for Information Management System Certificates. That is the document that the crypto trading platforms use as an operating license. Out of the 20 exchanges with certificates, 11 have already delisted tokens or issued warnings following in the footprints of Upbit.
Since many crypto exchange tokens do not operate on a proprietary blockchain, the legal definition of s“handle tokens” issued by exchange may be stretched in the coming days. For now, South Korea’s cleaning of the crypto sector continues.