After the Terra collapse, South Korean authorities have to act carefully and put more and more pressure on exchanges. Exchanges proactively unite and regulate.
💡 You can find more on the influence of Terra collapse on global policies here.
This summer Upbit, Bithumb, Coineone, Korbit, and Gopax — the top 5 largest crypto exchanges in Korea, formed a Digital Asset eXchange Alliance (DAXA) to jointly work on investor protections against volatility and fraud following the Terra-Luna incident. The organisation also plans to draft policy proposals for government attention.
The alliance consists of four divisions: transactions support, market activity monitoring, compliance monitoring, and training. The transactions support team is to create a set of guidelines on listing and delisting procedures to minimise market confusion and protect investors. So far, each listing has been carried out according to different regulations. It is a response to the demand for unification of listing rules raised by the Terra-Luna incident.
Later this year these five exchanges will apply for joint listing rules prepared through the DAXA Council on a trial basis.
At the moment Upbit is the only major exchange to disclose its listing procedure to the public.
Upbit’s initial checklist is divided into three categories:
- Transparency of the project (in this category technical capabilities, and specific roadmap implementation plans are looked at as well as compliance and conduct of due diligence and money laundering)
- Smooth trading support
- Fair participation of investors
💡 You can download the list here and check if you comply with the criteria!
If a coin passes this initial review process, it will enter the detailed review stage. At this stage, the specific confidentiality memorandum between Upbit and the project is signed. Projects that have undergone detailed review are referred to the Transaction Support Deliberation Committee for final review and listing.
Delisting criteria are also shared:
- Violation of laws
- Inappropriate use
- Discovery of technological vulnerabilities
- Abandonment of the project by the original development team
- Violation of agreements
- Cases when users need to be protected
The Upbit representative said:
“The listing rules at the DAXA (Digital Asset Exchange Alliance) level are a concept of a broad guideline for agreement between exchanges. We will maintain and comply with the policy”.
Lee Seok-woo, head of Upbit, is the first DAXA president, which means that Upbit most likely will not only comply with the alliance policy but have a fair influence on the strategy of the alliance including its joint listing procedure.