A group of South Korea’s major cryptocurrency exchanges has launched a system that alerts users of abnormal changes in the prices of cryptocurrencies. The alliance, dubbed the Digital Asset Exchange Association (DAXA) and comprising Upbit, Bithumb, Coinone, Korbit, and Gopax, said the new system will prevent information asymmetry.
DAXA explained that the system sends notifications to users when the prices of cryptocurrencies suddenly rise or fall within a day. Additionally, the system notifies users whenever there is a sharp increase or decrease in the daily trading volumes or deposits, The Korean Times reported.
DAXA’s Standards for Exchanges
The latest development follows DAXA’s announcement of the ethical standards for its members last month. The standards: the DAXA Internal Control Standards, and the Code of Ethical Conduct for Virtual Asset Operators, outline how virtual asset service providers must conduct their business.
Among the guidelines stipulated in the standards is that cryptocurrency exchanges that are members of the alliance must involve a third-party legal expert when listing or delisting cryptocurrencies. Additionally, it states that the legal expert must not have a conflict of interest.
Besides that, the South Korean National Assembly recently passed legislation that would allow for the creation of a legal framework for the regulation of cryptocurrencies. The new law provides that digital asset service providers must separate user funds from their own and must insure customer deposits.
Additionally, the Virtual Asset User Protection Act, which will be implemented year, states that the VASPs must keep crypto reserves in cold wallets and maintain records of all the transactions. Moreover, the legislation mandates the Korean Financial Services Commission to inspect VASPs, and the Bank of Korea to supervise the data handled by the service providers.
South Korea Regulates Crypto
Finance Magnates reported in April that South Korean lawmakers were pushing for the regulation of digital assets to protect investors from fraudulent activities in the sector. The regulations, which touch on virtual assets, cryptocurrency exchanges, and the financial technology sector, are in response to the growing adoption of digital assets in the country.
South Korea is working to prevent fraud in the digital asset sector since the collapse of Terraform Labs and its cryptocurrency projects, TerraUSD and Terra LUNA, which cost investors billions of losses. The Founder of the projects, Do Kwon, is currently serving a jail term in Montenegro.
This article was written by Jared Kirui at www.financemagnates.com.
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