Fears are growing that crypto exchanges in South Korea will begin altcoin delisting this year at the request of the financial authorities.
Per a report from Business Post, there is a real danger that altcoins will be “delisted one after the other” in the coming weeks.
Altcoin Delistings Fears Spooking South Korean Market?
The media outlet reported that industry officials suspect a repeat of 2021. This was the year when most major domestic crypto exchanges purged scores of low-cap coins from their platforms.
In 2021, exchanges acted out of apparent anticipation of coming regulatory action. With a rise in public scandals surrounding so-called “scam coins,” regulators are under pressure to act again.
Officials have stated that they want exchanges to operate listing audits. They want exchanges to check the credentials of coin projects regularly.
Underperforming tokens, projects that lack sufficient transparency, and projects that show few signs of recent development should be placed on “cautionary” lists, officials insist.
Repeat of 2021 Altcoin Cull Expected?
Business Post claimed experts now “cannot rule out the possibility that many altcoins will be delisted at once,” in a repeat of 2021.
The regulatory Financial Supervisory Service (FSS) said it will present a set of “best practices” for exchanges to refer to when making delisting decisions.
The FSS reportedly wants to roll out its new guidelines for altcoins next month. It allegedly wants these to coincide with the launch of the Act on the Protection of Virtual Asset Users.
The act is slated to come into effect on July 19. An unnamed crypto industry official told the media outlet:
“It is my understanding that the financial authorities will announce their new guidelines before the act comes into force. I believe that they are preparing to implement the guidelines as quickly as possible.”
Cryptocurrency exchanges to evaluate listed coinshttps://t.co/JmGdoGgNyv pic.twitter.com/tNYnFm6T3l
— The Korea Times (@koreatimescokr) June 16, 2024
The news appears to have spooked the market. Some lower-cap altcoin prices have dropped on major exchanges.
Exchanges Say No Mass Delisting Are Expected
Exchanges have been calling for calm, however. Media experts claim that high-cap coins like XRP, Solana, and Cardano with international credentials are safe.
They say that the FSS is much more likely to scrutinize lower-cap projects.
The market-leading South Korean crypto exchange Upbit said, in a press release published on June 19:
“Upbit already has a maintenance review process for cryptoassets. [We] conduct reviews of the coins we list on a regular basis. The so-called ‘lists of soon-to-be delisted coins’ spreading in some online communities are complete fiction.”
A chart showing trading volume per market pair on the Upbit crypto exchanges on June 24, 2024.
Trading volume per market pair on the Upbit crypto exchanges on June 24, 2024 | Source: CoinGecko
The exchange concluded: “It is very unlikely that any such large-scale delistings will take place.”
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