Is a Wave of Altcoin Delistings Imminent in South Korea? Here’s What You Need to Know

There are growing fears that South Korean cryptocurrency exchanges may start delisting various altcoins this year due to pressure

Written by: Arslan Butt • Tuesday, June 25, 2024 • 2 min read

• Last updated: Tuesday, June 25, 2024

There are growing fears that South Korean cryptocurrency exchanges may start delisting various altcoins this year due to pressure from financial authorities.

According to a report from Business Post, there is a significant concern that altcoins will be removed “one after the other” in the coming weeks, reminiscent of the large-scale delistings that occurred in 2021.

Industry Officials Fear Repeat of 2021 Purge

In 2021, many South Korean crypto exchanges removed numerous low-cap coins from their platforms in anticipation of regulatory action. This action was prompted by an increase in public scandals involving fraudulent coins, leading regulators to demand stricter oversight.

South Korean crypto exchanges might remove about 600 altcoins this year due to new rules starting in July. They will check and review these coins regularly, marking and possibly removing the risky ones to follow the new Virtual Asset User Protection Act.

— BlockVoyager (@BlockVoyagerAIO) June 17, 2024

Now, with similar conditions emerging, officials are calling for exchanges to conduct regular audits of listed coins.

Officials have indicated that tokens that underperform, lack transparency, or show little recent development should be placed on cautionary lists. A source within the industry stated, “We cannot rule out the possibility that many altcoins will be delisted at once,” echoing the mass cull of altcoins in 2021.

Regulatory Guidelines and Market Impact

The Financial Supervisory Service (FSS) is expected to introduce a set of “best practices” for exchanges to follow when making delisting decisions. These guidelines are anticipated to coincide with the launch of the Act on the Protection of Virtual Asset Users, scheduled to take effect on July 19.

🔍 According to IT Chosun, the Financial Supervisory Service (FSS) in South Korea is expected to establish autonomous screening standards for each exchange regarding the listing of virtual assets. At the 2024 Digital Finance Forum, Ahn Byeong-nam, head of the virtual asset team…

— BitcoinWorld Media (@ItsBitcoinWorld) June 19, 2024

An anonymous crypto industry official noted that the news has already caused lower-cap altcoin prices to drop on major exchanges.

Despite these fears, leading South Korean exchanges are urging calm. Upbit, a major crypto exchange, reassured users in a June 19 press release, stating, “It is very unlikely that any such large-scale delistings will take place.”

They emphasized that higher-cap coins with strong international reputations, such as XRP, Solana, and Cardano, are not expected to be affected.

In conclusion, while concerns over mass altcoin delistings in South Korea are mounting, top exchanges are confident that only lower-cap, less transparent projects will face scrutiny.

As regulatory guidelines are introduced and the new Virtual Asset Protection Act comes into effect, the market will likely see increased oversight aimed at protecting investors.