South Korea passes "Virtual Asset Protection Act"! Local exchange association implements cryptocurrency asset alert system

South Korea passed the Virtual Assets Protection Law on Friday to protect cryptocurrency investors and prevent unfair trading practices. The aim is to establish a sound and transparent trading order and system. In addition, DAXA, the consulting organization for digital asset exchanges in South Korea, which just launched its official website in May this year, announced today the introduction of a "Virtual Asset Alert System," which has been implemented immediately.

South Korean Financial Authorities: Second-Phase Legislation Underway

According to local media reports, the South Korean National Assembly passed the " Virtual Asset Protection Act" on the 30th. The Financial Services Commission (FSC) of South Korea stated that they are preparing for the second phase of legislation to achieve more comprehensive regulation.

The bill will explicitly regulate and penalize behaviors such as "user asset segregation protection, exchange reserve funds, unfair market trading," and grant the FSC the authority to supervise and sanction the cryptocurrency market and related entities. The law is expected to take effect one year after the announcement, starting in July next year.

In a press release issued by the FSC stated:

The second-phase legislation will involve cooperation and consultation with multiple government departments to draft more detailed regulations on the issuance and risk disclosure of crypto assets.

South Korean Exchange Association Launches Virtual Asset Alert System

According to reports from Korean media, the Digital Asset Exchange Association of Korea (DAXA) will implement the "Virtual Asset Alert System" starting today.

The alert system will report on five categories including "drastic price fluctuations, surge in trading volume, surge in deposits, price differences, and concentration of trading in a few accounts," and trigger warnings to users through real-time monitoring of each exchange.

When trading pairs that meet the conditions are detected, they will be marked with warning badges, which can last up to 24 hours, and the rules will be adjusted individually based on the trading volume and depth of each exchange.

Jaejin Kim, Vice Chairman of DAXA, explained:

The main goal of the alert system is to address user information inequality and eliminate information disparities.

What is DAXA?

In May last year, after Terraform Labs, a South Korean-founded company, and its products Luna, TerraUSD collapsed, causing a severe impact on the international cryptocurrency market, several South Korean exchanges realized the need for a faster and more efficient communication and collaboration channel.

Therefore, the "Digital Asset Exchange Association of Korea (DAXA)," spontaneously formed by South Korea's five major cryptocurrency exchanges Upbit, Bithumb, Coinone, Korbit, and Gopax, was established in June last year and launched its official website in May this year. Through the signing of memorandums containing specific measures, they are collectively committed to preventing investors from threats of volatility and fraud.

The organization consists of four departments: exchange audit, market activity monitoring, compliance monitoring, and personnel training. They are responsible for reviewing the listing and delisting of cryptocurrencies, maintaining market order, and monitoring illegal activities.

It is reported that the size of the South Korean cryptocurrency market officially exceeded 300 trillion Korean won (approximately 23 billion US dollars) at the end of 2021, indicating a significant interest among local residents in cryptocurrencies.