|Korea Blockchain Association executive Jeon Ha-jin unveils rules aimed at improving cryptocurrency market transparency. The announcement was made at the Korea Federation of SMEs in Seoul, Tuesday. / Yonhap|
By Park Si-soo
South Korea's major cryptocurrency exchanges have set up rules to boost transparency of deals and head off money laundering, insider trading and other illegal deals that have stunted the growth of blockchain technology.
At a press conference in Seoul on Tuesday, the leaders of 14 domestic crypto exchanges including Bithumb, Upbit and OKCoin announced the rules. They are members of the Korea Blockchain Association.
The association will inspect the system of the 14 exchanges and nine newcomers to see if their systems meet the rules. But the inspection could have a limited impact because the rules are not legally binding.
The rules suggest domestic crypto exchanges (1) manage clients' digital coins and their own separately (2) cope with abnormal transactions quickly (3) float new crypto with enhanced client protection system (4) hold a minimum equity of 2 billion won and (5) publish regular audit and finance reports.
The association will also look into member companies' systems to check if there are loopholes that could be used for insider trading, price rigging and money laundering.
The association said its members had not yet reached a consensus on an advanced notice of initial coin offerings (ICO).
"There are issues left unsettled," an official said.
Members are supposed to submit self-inspection reports to the association by May 8. For its part, the association will start its inspection of members from May 1.
"The rules are basic requirements to ensure transparent crypto transactions," said an association official. "We will come up with more measures to bring order to the chaotic cryptocurrency market and to protect clients better."