The 'best practices for virtual asset transactions,' developed by financial authorities and virtual asset exchanges after studying the listing review criteria for meme coins, will be released soon. Meme coins are coins created playfully based on people or animals, making it difficult to find actual utility or value, yet they are popular among domestic investors.
According to the virtual asset industry on the 30th, financial authorities have begun final preparations for the revision and supplement of the best practices for virtual asset transaction support. The authorities plan to hold the 4th Virtual Asset Committee on May 1 to finalize the best practices and distribute materials within this week. This 4th Virtual Asset Committee will discuss not only the best practices but also the participation of non-profit organizations such as designated donation organizations and universities in the market, relevant to the corporate market set to be held in the second half of the year.
The best practices are expected to include strengthening the listing criteria for meme coins and preventing hasty listings by exchanges. The authorities are likely to require the verification of a certain volume of transactions or a history of listings on overseas exchanges during the listing review process. In particular, in order to prevent the so-called 'listing beam' occurring from newly listed virtual assets lacking liquidity, there are expected to be recommendations to secure a certain level of liquidity and support transactions. The term 'listing beam' refers to the phenomenon where the price of a coin skyrockets like a laser beam after listing.
Contents related to strengthening internal controls at virtual asset exchanges will also be included. Regarding internal controls for employees, it is expected that the requirement for account reporting will be included. A financial authority official noted, "The core of the best practices to be released is related to meme coins and listing beams, and there is a consensus formed among virtual asset exchanges about preventing listing beams, so it will be addressed as a priority."
Since the election of U.S. President Donald Trump at the end of last year, meme coins have experienced significant volatility in the global virtual asset market. As a result, the domestic virtual asset market also saw instances of prices sharply rising and falling immediately after listings, known as listing beam incidents, continuing until early this year. For instance, the Ethereum-based Layer 2 blockchain network Movement coin, which gained attention at the end of last year, surged 46,000 times right after listing before plummeting in less than an hour.
As meme coins gained popularity, domestic virtual asset exchanges also began to support transactions through unprecedentedly rapid listing procedures. However, criticism arose regarding the listing of meme coins that lack specific use cases or technological capability, which neglects investor protection. Furthermore, as the price volatility after listings resulted in harm to retail investors, financial authorities began to closely monitor the situation.
The Financial Supervisory Service (FSS) formed a 'Task Force for Revising Best Practices for Virtual Asset Transaction Support (Listing)' in February together with virtual asset exchanges and the Digital Asset Exchange Joint Council (DAXA) and started discussions on meme coins.
Virtual asset exchanges have stated that they will comply as soon as the best practices are distributed. Previously, in July of last year, when DAXA released the transaction support best practices, about ten companies, including domestic won transaction exchanges, also participated in the best practices.
A government official stated, "The revision of the best practices is in the final stage and is expected to be released after tomorrow's meeting," adding, "However, there are no specific details or established guidelines regarding the recently raised issue of 'listing beam sidecars (a system that halts program trading for five minutes when a specific stock experiences significant volatility lasting more than one minute).'"