Cross-trading, transaction of own coins banned for cryptocurrency exchanges

The regulatory Financial Services Commission on Thursday said that it will add detailed measures to the legislation governing cryptocurrency exchanges in an effort to tame their attempts at price fixing.

Cryptocurrency exchanges will be banned from handling digital tokens issued by themselves or affiliated people, according to a pre-announcement of the revisions made to the enforcement decree of for the Specified Financial Transaction Information. Executives and employees of an exchange are banned from trading on their own platform, the revision showed.

The FSC said that these measures are made to clarify certain clauses in the enforcement ordinance as financial authorities are shaping regulations on an emerging industry like digital assets.

The revision to enforcement decree also stipulates that financial institutions must carry out risk assessments for all customers. Previously, the law was interpreted such that financial institutions had to conduct risk assessments of customers only to identify high-risk investors.

These measures were first introduced at a meeting held among several government bodies last month aimed at coming up with a series of measures for cryptocurrency exchanges.

Local cryptocurrency exchanges are working hard to register with financial authorities by Sept. 24, when the grace period for the Specified Financial Transaction Information ends. However, the changes and updates in regulations are making it difficult for them to predict and prepare for the registration process, an official at a cryptocurrency exchange said.

“It is hard to predict and proactively prepare as the regulatory framework progresses within a short amount of time. Having said that, we will try our best to comply with the new laws and prepare for the registration step by step,” the official said.

By Park Ga-young (gypark@heraldcorp.com)