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Unconfirmed Delisting Rumors Trigger Panic
Quarterly Review and Investor Panic
Impact on Competing Coin Prices
Listing Inspection Standards Explanation
Financial Supervisory Commission Clarifies its Role
Overreaction to New Legislation
Financial Supervisory Commission Calls for Caution in Investing
With the expected enforcement of the Virtual Asset User Protection Act (Virtual Asset Act) in South Korea next month, the cryptocurrency market has experienced significant turmoil. Due to rumors that several competing coins may be delisted, the prices of many digital assets have dropped sharply.
South Korea plans to establish a “Virtual Asset Division” by the end of June, aimed at protecting user assets, with public officials prohibited from holding virtual assets.
Starting next month, financial authorities plan to conduct quarterly reviews of 600 domestic digital assets. Coins that do not meet specific standards may face trading suspensions, causing widespread panic selling among investors.
In fact, the Securities and Futures Commission in Hong Kong also conducts similar listings of digital assets, but as South Korea is currently a key cryptocurrency market, the impact is expected to be more widespread.
According to reports from South Korean media, rumors have circulated about the potential delisting of 16 competing coins in June. These speculations have led to a 10-20% drop in the prices of about half of the coins listed on Upbit.
Listing inspections are divided into formal and qualitative categories. Formal inspections focus on the reliability of the issuing entity, user protection mechanisms, technical security, and legal compliance. Quality inspections consider total issuance and circulation plans as well as changes in business plans.
The Virtual Asset Supervision Bureau of the Financial Supervisory Service clarified that financial authorities do not directly participate in the inspection of virtual asset transactions. The bureau had submitted relevant details to parliament when the Virtual Asset Act was formulated. The Financial Supervisory Service supports the establishment of uniform listing standards for exchanges but does not directly inspect individual assets.
Cryptocurrency exchanges attribute the market crash to investors’ overreaction before the law is implemented. An exchange operator mentioned that the new standards do not differ significantly from previous ones, indicating a low likelihood of mass delistings.
Recent rumors of delisting lists are not the first to appear. Such rumors typically revolve around high-volume “kimchi coins” and have often been baseless in the past.
The Financial Supervisory Commission urges investors to act prudently, pointing out that many alternative coin investors lack a full understanding of their investments. A Financial Supervisory Commission official emphasized the principle of investment responsibility and warned investors to be cautious of risks.
Further reading
Former SEC Cryptocurrency Chief Resigns, Denies Rumors of Joining Meme Coin Issuance Platform Pump.fun
FSC’s Peng Jinlong Three Waves of New Policies: Promoting Asia as an Asset Management Center and a Lightweight Sandbox