The Korean financial authority has launched an investigation into the exchanges to check whether any of them are self-listing their own coins. This investigation is the result of the bankruptcy of the FTX exchange. FTX, which has already been covered in a slew of articles, filed for bankruptcy in the United States on November 11, hurting more than 100,000 creditors. Customers fled the stock market en masse because of doubts about FTX’s capital adequacy.
Korean Rules Governing Scholarships
Exchanges are not allowed to issue their own native tokens. For example, the Korea Financial Intelligence Unit (KoFIU), which is part of the Financial Services Commission (FSC), investigates likely violations of this rule. The Korean regulator has decided to take the lead after the bomb caused by FTX. According to an FSC spokesperson, national exchanges cannot issue their own coins. The financial authorities conducted the first round of investigations. In addition, they plan to look into more specific details, especially when it comes to citing native coins.
Indeed, not only national exchanges cannot list home currencies, but the sale, exchange or brokerage of listed currencies is prohibited. The Disclosure and Use of Itemized Financial Transaction Information Act regulates the industry. One of the Daegu-based exchanges is currently under investigation. It is suspected that FLAT, a coin listed in January 2020, could be a so-called native coin. Financial authorities have confirmed that the five major exchanges, including Upbit and Bithumb, have not issued any coins of their own. However, the reviews on the smaller exchanges are not yet complete.
The impact of the collapse of FTX in South Korea
According to the local press, the number of Korean investors in FTX is about 6000. Korean users generated 6% of FTX’s internet traffic in October. According to Compareweb, this figure puts them second behind Japan. The CEOs of the five major exchanges have said it is unlikely that a similar incident will occur in Korea. Indeed, during a meeting with KoFIU on November 16, the CEOs claimed that Korean law would not allow such an event. They added that the fundamental factor in the collapse of the FTX is the lack of organization and regulation. The collapse was reportedly precipitated by the misuse of client assets and the misuse of its native currency FTT.
In an effort to preserve FTT’s value and stability before the fall, Alamada Research, a trading firm co-founded by FTX founder Sam Bankman-Fried, bought and sold most of the exchange’s FTT, essentially making the token price was set. The collapse of FTX caused a drop in cryptocurrency prices. This wiped out about $180 billion in digital assets this month.
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Against the angelicism of the advocates of the current monetary system, I am against DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.