South Korea’s 600 Token Inspection Sparks Altcoin Panic

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As a seasoned crypto investor with a keen interest in following regulatory developments in the industry, I find myself both intrigued and concerned by the recent news emanating from South Korea. The impending Virtual Asset Law and its potential implications for altcoin listings on local exchanges have caused quite a stir among investors, resulting in significant price drops for many coins.

A South Korean news report revealed that over 600 cryptocurrencies will be examined by exchanges following the enactment of the new virtual asset law, due in the upcoming month. This announcement sparked fear and led to a notable drop in altcoin values. However, it’s important to note that the South Korean government is not directly involved in this review process, aiming to allay public concerns.

Prior to the Virtual Asset User Protection Act (Virtual Asset Act) taking effect next month, the values of numerous virtual assets experienced sharp declines as a result of unverified rumors about potential delisting of certain altcoins. The legislation’s objective is to establish a regulated system for virtual asset transactions and safeguard users, yet these concerns among investors have arisen inadvertently.

Upcoming Virtual Asset Law, Quarterly Reviews and Investor Panic

There was a mass sell-off of virtual assets among investors following the financial authorities’ announcement that they would begin quarterly reviews of around 600 domestic cryptocurrencies starting in July. According to reports from industry insiders on June 18, rumors spread rapidly through social media and coin communities about possible delistings, leading to substantial price drops for numerous altcoins.

Approximately half of the coins traded against the Korean won on Upbit exchange experienced decreases ranging from 10-20%. An upcoming evaluation will determine if these coins adhere to “acceptable transaction support standards” for listing, potentially leading to delisting for questionable cryptocurrencies. This news has caused concern among investors.

The evaluation standards encompass both formal and subjective elements. Formal elements consist of the credibility of the issuer, user safety, technology security, and adherence to regulations. Qualitative factors take into consideration the total amount supplied, distribution strategies, and any modifications to business plans. Financial regulatory bodies emphasized they do not participate in the actual review process.

Clarifications from Financial Authorities and Market Reactions

As an analyst, I would rephrase it as follows: When the Virtual Asset Act was under consideration in the National Assembly, I, along with the Financial Supervisory Service, provided additional information to support the establishment of uniform listing standards for cryptocurrency exchanges at their request.

Financial regulators oversee the management of virtual asset businesses, yet they don’t conduct individual token assessments. They played a role in establishing industry standards, but stressed that communications concerning tokens will originate from the cryptocurrency exchanges and Digital Asset eXchange Alliance (DAXA).

The recent significant price decline was attributed to investors reacting excessively before the law’s implementation, according to the interviewees. They added that mass delisting is an unlikely scenario, as unjustified lists of potential delistings frequently emerge within relevant circles, particularly for “Kimchi Coins” with substantial domestic trading activity.

The Financial Supervisory Service strongly advised investors to stay informed about potential risks, as many individuals investing in altcoins often lack sufficient knowledge regarding their investment choices. An authority figure emphasized the significance of prudent investing practices, urging investors to assess risk factors and the longevity of their investments before proceeding.

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2024-06-18 13:19