To ensure compliance with the upcoming Virtual Asset User Protection Act, Korean financial authorities plan to reassess the listing status of approximately 600 cryptocurrencies traded on domestic exchanges, sparking panic among Korean investors. The Financial Services Commission clarified today that individual projects will not be directly reviewed, as this responsibility will be handled by exchanges and the Digital Asset Exchange Association of Korea (DAXA), with a low likelihood of large-scale delistings.
Reassessment of listing status for around 600 domestic cryptocurrencies
Korean cryptocurrency listing standards
FSC statement: Tokens will not be directly reviewed
Low likelihood of large-scale delistings
In June of last year, the Korean National Assembly passed the Virtual Asset User Protection Act, introducing a regulatory framework for virtual assets. On December 11th of the same year, the Financial Services Commission (FSC) proposed detailed rules under this law, set to take effect on July 19th this year.
According to Korean media reports yesterday, in order to ensure compliance with the upcoming Virtual Asset User Protection Act, Korean financial authorities plan to reassess the listing status of approximately 600 cryptocurrencies traded on domestic exchanges. Tokens that do not meet the standards will be designated as warning tokens and then delisted.
The 29 virtual asset exchanges reporting to financial authorities, including Upbit, Bithumb, Coinone, Korbit, and Gopax, must conduct preliminary reviews to determine the maintenance of all tokens’ listings. An official from the financial authority stated that the Korean cryptocurrency listing review decision-making body is expected to review the following 9 aspects:
Reliability of the issuing entity
User protection measures
Technology and security
Compliance with laws and regulations
Capability and social credit of entities involved in issuance, operation, and development
Significant information disclosure
Potential conflicts of interest and resolution measures
Security of ledgers and virtual assets, and checking for centralized risks
Normal trading on overseas markets meeting the conditions for more than two years
Yesterday, a list of “potential delisting projects” circulated on Korean social media, mentioning 16 altcoins. As a result, approximately half of the cryptocurrencies on Upbit’s Korean won market experienced a sharp decline in price by 10% to 20%.
The report clarified that the FSC stated that this information was additional data submitted to the National Assembly when the Virtual Asset Act was being formulated. At that time, the National Assembly requested the FSC to assist in formulating unified exchange listing standards. The FSC emphasized that the recent widespread price drop incident was due to investors’ excessive interpretation of the upcoming law and predicted that the actual likelihood of large-scale delistings is extremely low.
A relevant person from an exchange stated that detailed listing rules have not yet been released, so it is not possible to confirm completely. She emphasized that the maintenance of listing reviews this time is not a new practice but a routine task that has always been carried out, not a sudden action. She also mentioned that the list of expected delisting projects circulating recently has been spread multiple times in related communities, mainly targeting “kimchi coins” with concentrated domestic trading volume, but most of them are unsubstantiated content.
