regulations and compliance puzzle

South Korean regulators mull over new listing procedure following WEMIX’s delisting

South Korean financial regulators are considering wading into the control of the token listings for the country’s digital asset industry, reports The Herald Business.

According to the report, authorities were rattled by the decision of the Digital Asset Exchange Joint Consultative Body (DAXA), a coalition of leading local exchanges, to delist WEMIX from their platforms. The delisting and the court’s ruling backing DAXA may have forced the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU) to mull over new regulations for the industry.

Both agencies are pushing for the listing of new tokens to be removed from the purview of digital asset exchanges. The financial authorities claim that listing and delisting new tokens could be subject to the whims and caprices of DAXA, which poses a threat to investors.

Under the proposed structure, companies looking to be listed in South Korean exchanges will have to seek the consent of the FSC. With South Korea’s legislators working on the incoming Digital Asset Basic Act (DABA), there are reports that the suggestion will be pushed for deliberation by legislation.

However, it may not be smooth sailing for the proposed listing process as industry players feel that the move amounts to a “radical intervention” by regulators. Others have argued that the move would be burdensome for the FSC, already careening under the weight of regulating virtual asset service providers.

Japan employs a similar listing process in which the Virtual and Crypto Assets Exchange Association (JVCEA) vets tokens before listing them on local exchanges. JVCEA has faced criticisms in the past for its stringent listing requirements, but the self-regulatory body has stated that it is looking to ease the listing process for token issuers.

WEMIX: The straw that broke the camel’s back

DAXA, a group representing leading South Korean exchanges, passed a resolution to delist WEMIX from their platforms. The exchanges claim that the token issuer failed to disclose the number of outstanding tokens, and to protect investors, it deemed it necessary to order the delisting.

DAXA’s decision received the backing of the South Korean courts, with the judge noting that revealing the “distribution number is crucial because the price is decided as a result of the balance between supply and demand.”

The court’s ruling sent WEMIX’s price tumbling by 70% in 24 hours and over 90% over the last 30 days. Wemade, WEMIX’s issuer, says it will continue its challenge of DAXA’s decision by sending a complaint to the Korea Fair Trade Commission.

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