The Korean Blockchain Industry Association, formed with 33 South Korean exchanges, has revealed a set of rules for 14 of its exchanges. The organization was formed in December of last year, where it was announced that famous cryptocurrency exchanges Bithumb, Coinone, Upbit and Korbit were also members of the self-regulatory group.
The first rule follows South Korean government’s anti-money laundering rules, according to Yonhap News. It will combat the use of cryptocurrencies in money laundering by identifying and verifying the users’ identity and keeping their transaction history for five years. Secondly, exchanges will have to employ methods to pinpoint and detect fraudulent or suspicious transaction activities. In such cases, exchanges will also need to decide the course of action required to tackle the situation.
The third rule requires crypto companies to create “listing procedure committees” to observe every ICO token they plan to trade on the exchange. Additionally, members must have an equity capital of at least 2 billion Won. Financial documents such as statements, audit reports, and shareholder lists should also be submitted to the organization. The fourth rule covers code of ethics by creating an ethics charter which includes (Non-Disclosure Agreements) NDAs for employees while disallowing illegal transactions.
In order to improve security for customers, the association introduced a security council which will evaluate all 14 exchanges. Jeon Jae-jin, the chairman of the association, said, “We will establish the order of the domestically cryptographic money market through self-regulatory review. By providing a safeguard for the protection of users, we will contribute to ensuring the asset safety.”
However, companies still have some time since the rules will be finalized by May 31. Afterward, every exchange will submit the aforementioned documents before Jun. 8 – their results will be disclosed within two or three weeks after the submission.
Earlier this year, the South Korean government announced that it would support cryptocurrency transactions if they were conducted ‘normally’. Customers would have to use their real names and verify their personal information on both cryptocurrency exchanges and banks to reduce risk. Therefore, by following Korean Blockchain Industry Association’s guidelines, exchanges will have a better chance to create a healthy environment for crypto users.
Featured image from Shutterstock.Follow us on Telegram or subscribe to our newsletter here.
• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.