Altcoins Plunge Across the Board Due to New Law in South Korea? Fear of Kimchi Coin Delisting Sparks Sell-Off, South Korean Regulators Deny

Table of Contents

Unverified Delisting Rumors Spark Panic

With the expected enforcement of the "Virtual Asset User Protection Act" in South Korea next month, the cryptocurrency market has experienced significant turmoil. Rumors of several competing coins potentially being delisted have led to a sharp decline in the prices of many digital assets.

South Korea is set to establish a "Virtual Asset Division" by the end of June, aimed at protecting user assets, with public officials prohibited from holding virtual assets.

Quarterly Reviews and Investor Panic

Starting next month, financial authorities plan to conduct quarterly reviews of 600 domestic digital assets. Coins that do not meet specific criteria may face trading suspensions, triggering widespread panic selling among investors.

In fact, the Hong Kong Securities and Futures Commission also conducts similar reviews of listed digital assets. However, as South Korea is currently a key market for cryptocurrencies, the impact is expected to be more widespread.

Not Losing to South Korea! South Korea's Financial Services Commission: Cryptocurrency users reach up to 6.45 million, with 70% investing less than $800

Hong Kong's Cryptocurrency Regulations Effective on June 1: Exchanges have a heavy responsibility to protect retail investors and are temporarily banned from trading stablecoins

Impact on Competing Coin Prices

According to reports from South Korean media, rumors circulated online about 16 competing coins that could be delisted in June. These speculations led to a 10-20% price drop in around half of the coins listed on Upbit.

Explanation of Listing Inspection Standards

The listing inspection requirements 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. Qualitative inspections consider total issuance and circulation plans, as well as changes in business plans.

Financial Supervisory Service Clarifies Its Role

The Virtual Asset Supervisory 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 the National Assembly during the formulation of the Virtual Asset Act. The Financial Supervisory Service supports establishing unified listing standards for exchanges but does not directly inspect individual assets.

Overreaction to New Legislation

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 the previous ones, indicating a low likelihood of massive delistings.

Rumors of recent delisting lists are not new. Such rumors typically revolve around high-volume "kimchi coins" and have often surfaced in the past, usually without any basis.

Financial Supervisory Service Urges Caution in Investments

The Financial Supervisory Service urges investors to act with caution, pointing out that many altcoin investors lack a full understanding of their investments. An official from the Financial Supervisory Service emphasized investment responsibility principles and warned investors to be mindful of risks.