In preparation for the upcoming enforcement of the Virtual Asset User Protection Act, the Financial Supervisory Service (FSS) has revealed plans to conduct a thorough examination of 600 domestic virtual assets. This announcement has triggered a wave of panic selling among investors, leading to a sharp decline in the prices of various altcoins, particularly those known as ‘Kimchi Coins.’
As outlined in a local report, the FSS will commence quarterly reviews of virtual assets listed on domestic exchanges starting next month. The goal of these reviews is to ensure that all listed coins adhere to strict standards for listing maintenance. The looming reviews have instilled widespread fear among investors, resulting in a surge of selling activity.
On the 18th, the virtual asset industry disclosed that 16 altcoins are at risk of being removed from listings. Speculation about potential delistings, largely propagated through social media and coin communities, has caused price drops ranging from 10-20% for approximately half of the coins available on the KRW market.
The review standards set by the FSS encompass both formal and qualitative criteria. Formal requirements include evaluating the credibility of the issuing entity, user protection protocols, technology security, and legal adherence. Meanwhile, qualitative requirements focus on factors such as total issuance volume, distribution strategies, and alterations to the business plan.
Despite concerns among investors, the FSS clarified its role in the review process. The Virtual Asset Supervisory Bureau of the Financial Supervisory Service emphasized that the information in question was initially submitted as supplementary material to the National Assembly during the enactment of the Virtual Asset Act, highlighting that the FSS does not directly oversee virtual asset transactions.
The recent drop in prices was attributed by the virtual asset exchange to investor overreactions. An official from Korea’s Korean Won Exchange pointed out that the review of transaction maintenance is a continuation of established practices rather than a sudden shift. The official explained that the review standards are essentially a consolidation of the practices already in place at various exchanges, minimizing the likelihood of widespread delistings.
Furthermore, the exchange addressed the proliferation of baseless rumors regarding potential delistings. Officials emphasized that such rumors have circulated in the past, often targeting ‘Kimchi Coins’ due to their significant domestic trading volumes.