With the upcoming enforcement of the Virtual Asset User Protection Act in South Korea, financial authorities are expected to release new guidelines for virtual currency trading. This has caused anxiety among cryptocurrency investors, particularly regarding the potential delisting of altcoins. The guidelines, known as “Virtual Asset Trading Support Best Practices,” aim to improve the reliability and credibility of the cryptocurrency market by setting standards for trading support and maintenance reviews. There are concerns that these guidelines could lead to mass delistings similar to those seen in 2021 when Upbit temporarily terminated support for 24 types of virtual currencies.
However, the overall reliability of the cryptocurrency market has improved since 2021, making large-scale delistings less likely. Upbit has assured investors of its regular maintenance reviews and transparent evaluation criteria, dismissing rumors of imminent large-scale delistings. Despite these reassurances, the potential for sudden delistings based on the new guidelines remains. Exchanges could terminate support for cryptocurrencies with hacking problems or non-transparent circulation volumes, negatively impacting both the delisted cryptocurrencies and broader market sentiment.
Some industry officials believe that the current level of concern is excessive and that the guidelines could ultimately strengthen market credibility. Kim Ji-won, a researcher at KB Securities, suggests that the guidelines will act as a form of self-regulation, complementing the Virtual Asset User Protection Act and fostering a self-purifying effect in the market. The aim is to create a more transparent and reliable cryptocurrency market in South Korea, enhancing investor confidence and market stability. Overall, the industry is preparing for potential changes in the cryptocurrency landscape as the new guidelines come into effect alongside the Virtual Asset User Protection Act in July 2024.
