S. Korea Proposes Unified Crypto Disclosure System After WEMIX Fiasco
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S. Korea Proposes Unified Crypto Disclosure System After WEMIX Fiasco

South Korea's Financial Supervisory Service recommended a unified disclosure system to protect investors.
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South Korea’s financial market watchdog, the Financial Supervisory Service, has put forward a proposal for a unified system for mandatory information disclosure from digital asset exchanges and crypto token issuers, Asia Business Daily reported. The move comes after a series of bankruptcies in the crypto space and the WEMIX fiasco last month.

South Korea Regulator Proposes Unified Disclosure System to Protect Crypto Users

South Korea’s financial markets regulator has proposed establishing a unified system for mandatory information disclosure from crypto exchanges and virtual token issuers to protect investors from fraud, according to local media reports. The proposal was put forward during the meeting of the government’s Digital Assets Committee by Ahn Byung-nam, head of research at the regulator’s Digital Asset Research unit.

In addition, other South Korean officials called for tighter disclosure on crypto bourses and token issuers in the wake of a string of collapses and frauds in the digital assets industry in 2022. Jeon In-tae, a professor of mathematics at South Korea’s Catholic University, said disclosing crucial financial information must be an obligation to safeguard investors. However, he added that there are currently no requirements for such digital assets.

The East Asian nation has been ramping up efforts to develop a comprehensive regulatory framework to protect investors. Several proposals have been submitted to South Korea’s National Assembly, but none have been further discussed at its parliamentary meetings.

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South Korea’s DAXA Developing a Unified Standard for Crypto Exchanges Following WEMIX Delisting

During the meeting, the CEO of the local crypto exchange Coincone, Cha Myung-hun, said the country’s Digital Asset eXchange Alliance (DAXA) is working on a unified standard for crypto exchanges in token delisting, the reports added. DAXA is a joint consultative body launched by South Korea’s top five crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and GOPAX.

The move comes less than two months after DAXA delisted WEMIX, a native token of Microsoft-backed blockchain game developer Wemade. The alliance delisted the token due to false reports of the token’s circulation numbers.

Wemade filed an injunction with the court against the DAXA exchanges to avoid the delisting, but it was dismissed by the Seoul Central District Court. As a result, WEMIX was delisted on Dec. 8 from Upbit, Bithumb, Coinone, and Korbit. The token was delisted just a month after Wemade bagged $46 million in funding from Microsoft and other investors.

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Would you like to see a similar proposal in the US to provide better protection to crypto users? Let us know in the comments below.