Crypto investors have been left “confused” after a spate of altcoin delistings on major South Korean exchanges has escalated to the point where the regulator has stepped in with yet more rules for under-fire trading platforms.
Already reeling from racing to adopt a long list of compliance measures in time for a September 24 deadline, exchanges will now have to answer to the Financial Service Commission (FSC) when listing and delisting certain coins on their platforms.
Per Channel A and Yonhap News TV, exchanges have been told they can no longer list tokens that they have issued, or coins operated by projects they are associated with. But events of recent days appear to demonstrate that exchanges are getting wind of the FSC’s policies in advance – and appear to be delisting tokens with zeal ahead of official announcements, possibly in a bid to curry favor from the regulator.
As Cryptonews.com reported, this week the likes of GDAC and Huobi Korea have pre-empted the FSC by announcing the delisting of all exchange-issued tokens.
Others, like Upbit, have gone yet further, delisting five coins “abruptly” last week, and slating 25 more for the ax.
One crypto trader surnamed Lee (first name withheld), told Cryptonews.com,
“Politicians have called the crypto industry the ‘Wild West.’ Well, the confusion they’re causing now is far more chaotic than that. I guess the government doesn’t care about us. Perhaps they’ll regret that when we next get the chance to vote.”
South Korean general elections are slated for Spring 2022.
But another crypto investor, surnamed Kim (first name also withheld), was more stoical, telling Cryptonews.com:
“This was all inevitable from the moment regulation was announced. Regulators will struggle for a while and so will exchanges. And there will be more upheaval ahead of September 24, and maybe beyond that. But eventually, the dust will settle and a new, more stable reality will emerge. Until then, we can only choose to HODL or keep trading and accept the uncertainty.”
Violators of the FSC’s newest edict will face fines of up to USD 88,500 and business suspension orders, with the regulator promising to stamp out “conflicts of interest.”
Channel A stated that a group of investors is now “preparing a lawsuit” against a crypto exchange that delisted a coin.
And the same media outlet quoted investors as stating that some have seen the mayhem as a chance to buy tokens at cut-price costs, with some suffering price drops of up to 80% on domestic platforms.
It added that some forecasters had predicted the “chaos in the crypto market” will be “aggravated” by the government’s regulatory pressure, exchanges’ responses, and investor sentiment “right up until September.”