South Korean Exchanges Pledge Compliance Amid New Altcoin Regulation, Here’s All

Coingapestaff
July 2, 2024 Updated May 19, 2025
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South Korea's FSC To Allow Corporate Investments in Crypto Assets

Highlights

  • South Korea implements the Virtual Asset User Protection law on July 19.
  • Exchanges commit to reviewing 1,333 altcoins to ensure compliance.
  • New regulations aim to balance investor protection with a vibrant altcoin trading scene.

South Korea’s cryptocurrency market is bracing for significant changes as new investor protection rules are set to take effect. The country, known for its vibrant altcoin trading scene, is about to implement the Virtual Asset User Protection law on July 19. This impending regulation has sparked widespread discussion in the crypto community about its potential impact on digital asset trading.

South Korea holds a prominent position in the global crypto market, with the Korean won recently surpassing the US dollar as the most-used currency for crypto trading. Approximately 10% of the country’s population has exposure to digital assets, with smaller coins comprising the bulk of trading rather than market-leader Bitcoin.

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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, has announced plans to review 1,333 altcoins over the next six months. This review aims to ensure compliance with the new Virtual Asset User Protection law and pushes back against concerns that the regulations might quickly stifle speculative trading in smaller digital assets.

The alliance has stated that immediate “mass delistings are unlikely” due to the extended evaluation period. Furthermore, all new token listings will be assessed in the context of the new law once it comes into force. This measured approach suggests a gradual implementation of the regulations rather than an abrupt market change.

The new legislation was partly prompted by the 2022 collapse of Luna and TerraUSD tokens, created by South Korean entrepreneur Do Kwon, which resulted in over $40 billion in losses. While the law aims to protect investors, it may increase operational costs for exchanges like Upbit, one of the world’s top crypto trading platforms. This development illustrates the ongoing balance between investor protection and maintaining South Korea’s dynamic crypto trading culture, particularly in altcoins.

Also Read: Central Bank of Bahamas Sets 2-Year Target for CBDC Integration

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Legal Developments in the Korean Crypto Space

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

The case centered on agreements to implement Fantom’s technology in South Korea’s food industry. The High Court found that SikSin and Ahn failed to meet their contractual obligations, including integrating Fantom’s technology and producing a viable technical paper for the Lachesis Protocol. The court also noted evidence of plagiarism in the plaintiffs’ work.

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

Also Read: Coinbase Cites Binance Case for Interlocutory Appeal in SEC lawsuit

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.