Korean Authorities Being Urged To Formulate Stricter Regulations By Upbit
The importance of guidelines for the proper functioning of the Crypto sphere has never been questioned. East Asian powerhouses such as Japan and Korea has been an example of how to let this industry flourish. Thus, some were taken aback when Lee Seok-wu, the CEO of Dunamu stated that stricter regulation is important to establish industry standards.
Dunamu is the parent company of South Korea’s largest crypto exchange Upbit. He was present along with other key players of the digital asset trading in the Korean market such as Bithumb, Korbit, and Coinone. Lee was also hosting members from the Financial Services Commission (FSC) when he commented:
“The role cryptocurrency exchanges play in the cryptocurrency and blockchain ecosystem is crucial and the industry with the government have to establish regulatory guidelines to ensure that the local market is operated by exchanges that meet high standards.”
The Dunamu head honcho emphasized that the current regulatory framework was good. However, as the industry is evolving, certain areas need more focus and should be improved upon.
Focal Points For The Prospective Laws
In his opinion, urgent action needs to be directed towards:
Ensure security standards of small exchanges: One of the main concerns he put forward is the relatively lower standards that many exchanges have. This leaves them vulnerable to hacking attempts. Addressing the gathering of government officials and regulators, Lee noted how the cryptocurrency market is already a risky one and its insecurity his heightened by the threat of security breaches that many small crypto exchanges are regularly victims of. Without standardization, minor players will continue to form but damage the reputation of the entire market, due to its vulnerabilities.
Poor KYC/AML policies hinder transparency: Lee was also interested in Know Your Customer (KYC) and Anti-Money Laundering (AML) segments that he felt needed work. Due to lax rules, the exchanges find it hard to monitor transactions.
“Due to the lack of regulatory guidelines on cryptocurrency exchange development, small businesses are aggressively launching exchanges that do not have adequate internal management systems and security protocols in place, negatively affecting the public image of the local cryptocurrency market.”
Regulatory guidelines need to promote standardization: The efforts of the larger crypto assets exchanges come to naught as the other minor exchanges lose the funds of their investors. This causes a trust deficit that takes a long while to recover from. The CEO went on to emphasize that the laws need to be strengthened so that all platforms, big or small, are on the same page. This could be as simple as setting up a framework that only allows an exchange to operate after sufficient security measures are in place.
UpBit Shows How It’s Done
All this talk is backed by the company’s action. Just last month, Upbit received the endorsement of the Korea Internet and Security Agency (KISA). It became the first exchange in South Korea to receive this sort of approval for supporting world-class security measures and protocols at their exchange. This is in addition to the recognition that the government has already bestowed on them. The company is a prominent information corporation with an information security management system (ISMS) license.
Crypto Future In South Korea
With its progressive outlook to the blockchain, South Korea remains an attractive option in Asia. It is one of the few developed economies, like Singapore, Japan, Switzerland and the U.S. that are vigorously implementing policies to aid in blockchain industry growth. The government has been keeping an open channel of communication with all in the industry to ensure proper regulations are enforced. This should also infuse more confidence in the local milieu and help the sector compete in other markets by attracting not only money but also talent.
All this hinges on timely and firm rules that appreciate the industry concerns and outline the country’s outlook towards this future tech. One can only hope that Lee Seok-wu words are heeded.
The views and opinions expressed in the article South Korean Upbit Exchange Urges Authorities to Formulate Stricter Crypto Asset Regulations do not reflect that of 48coins.com nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.