Altcoins
South Korea’s inspection of 600 tokens sparks panic over altcoins
The South Korean news outlet reported that exchanges will inspect 600 listed tokens after the implementation of the virtual asset law comes next month. This resulted in panic and a significant drop in altcoin prices. THE South Korea the government has made it clear that it is not directly involved in the review process, with the aim of reassuring the public.
In view of the implementation of Act on the Protection of Users of Virtual Resources (Virtual Asset Act) next month, the prices of dozens of virtual assets plummeted amid unfounded ‘delisting’ rumors linked to altcoins. The law aims to provide a structured framework for virtual asset transactions and protect users, but has inadvertently sparked fears among investors.
Upcoming virtual asset law, quarterly reviews and investor panic
Investors panicked and sold off virtual assets en masse after financial authorities announced plans to review 600 domestic virtual assets cryptocurrencies quarterly starting next month. According to industry sources, rumors quickly circulated across social media and coin communities about potential delistings on June 18, causing notable price drops for many altcoins.
On the Positive exchange alone, about half of the coins traded against the Korean won saw declines of between 10 and 20%. The upcoming inspection will assess whether coins meet “transaction support best practice” listing standards, with problematic cryptocurrencies facing potential delisting, fueling fears among investors.
The review criteria concern both formal and qualitative requirements. Formal aspects include issuer credibility, user protection, technological security and regulatory compliance. Qualitative factors look at total supply, distribution plans, and any changes to the business plan. However, financial authorities stressed that they were not directly involved in conducting the reviews themselves.
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Clarifications from the Financial Authorities and market reactions
The Financial Supervisory Service clarified that the information in question constituted additional material submitted to the National Assembly when the Virtual Assets Law was passed. The National Assembly had asked the Financial Supervision Service to help establish unified listing standards for cryptocurrency exchanges.
Financial authorities supervise virtual asset operators but do not directly examine individuals tokens. They helped create best practices, but stressed that any announcements will come from exchanges and the Digital Asset eXchange Alliance (DAXA).
Exchanges explained that the recent massive price drop was due to investors overreacting before the law was implemented. They said mass delistings are unlikely, pointing out that unsubstantiated lists of potential delistings often circulate in related communities, particularly for “Kimchi Coins” with high domestic trading volumes.
The Financial Supervisory Service urged investors to be aware of the risks, as many altcoin investors lack adequate information about their investments. One official highlighted the importance of responsible investing, warning that investors should consider risk factors and the sustainability of their investments.
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