The South Korean crypto market is in chaos. The upcoming implementation of the Virtual Asset User Protection Act next month has investors on edge. This new law has triggered a massive sell-off in altcoins, causing their prices to drop significantly.
Also Read: Is Altcoin sentiment reversal a signal for the market bottom?
The panic stems from the announcement that 600 tokens will be reviewed by exchanges after the law takes effect. However, it is worth noting that the South Korean government has insisted it is not directly involved in the review process.
South Korean exchanges to delist 600 tokens
The crypto market in South Korea is reeling. On June 18, crypto communities went crazy with lists of altcoins that might be delisted. Sixteen altcoins were named potential delisting candidates, causing their prices to fall by 10 to 20 percent on Upbit, per the report.
Starting next month, financial authorities will review 600 domestic crypto tokens quarterly. Tokens that do not meet listing maintenance standards could be suspended from trading. The new listing review requirements are divided into formal and qualitative categories.
Formal requirements include the reliability of the issuing entity, user protection measures, technology security, and compliance with laws. Qualitative requirements consider factors like total issuance volume, distribution plans, and changes to the business plan.
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Despite the panic, South Korean financial authorities have clarified their role. They stated they are not directly involved in the review process. The Financial Supervisory Service’s Virtual Asset Supervision Bureau provided information to the National Assembly to help establish unified exchange listing standards. However, the exchanges will conduct the actual reviews, not the government.
Exchanges try to calm the community
Exchanges are working to calm the market. They explain that the new law’s implementation will not lead to sudden, widespread delistings. The standards for listing maintenance have always been in place, and the upcoming reviews are part of an effort by South Korea to unify these standards across all exchanges.
According to a Korean Won Exchange official, the best practices for transaction support have not yet been finalized. The official emphasized that the new standards are not much different from previous ones and that the reviews are a regular part of maintaining market integrity. He added:
This isn’t something new. It’s just a renewal of the transaction maintenance review. The chances of a mass delisting are very slim.
The official also pointed out that similar lists of potential delistings have circulated in the past, often focusing on Kimchi coins, which have high domestic trading volumes. These lists are usually based on unfounded speculation rather than concrete evidence.
“Basically, there is a principle of responsibility regarding what one invests in. Coin investors in particular often invest without knowing much, so they need to be aware of the risk factors and invest in whether trading in this item can be maintained,” said the Financial Supervisory Service.
Cryptopolitan reporting by Jai Hamid
