In preparation for the upcoming enforcement of the Virtual Asset User Protection Act, the Financial Supervisory Service (FSS) has declared a thorough examination of 600 local virtual assets. This announcement has triggered a wave of panic selling among investors, resulting in a significant drop in the prices of various altcoins, particularly those known as ‘Kimchi Coins.’
As per local sources, the FSS has disclosed that starting next month, it will carry out quarterly assessments of virtual assets listed on domestic exchanges. The objective of this process is to ensure that all coins listed meet strict criteria for maintenance. The impending evaluations have instilled widespread fear among investors, leading to excessive selling.
Reports from the virtual asset industry on the 18th indicated that 16 altcoins were deemed at risk of being removed from the listings. This speculation, largely circulated through social media and coin communities, caused price declines ranging from 10-20% for approximately half of the coins available on the KRW market.
The review standards set by the FSS are divided into formal and qualitative requirements. Formal criteria encompass the credibility of the issuing entity, measures for user protection, technology security, and adherence to legal regulations. Qualitative standards focus on the total amount of coins issued, distribution plans, and any alterations to the business strategy.
Despite concerns among investors, the FSS clarified its role in the review process. The Virtual Asset Supervisory Bureau of the Financial Supervisory Service stated, “The relevant information was supplementary material submitted to the National Assembly during the enactment of the Virtual Asset Act,” stressing that the FSS does not directly scrutinize virtual asset transactions.
The virtual asset exchange attributed the recent price drops to exaggerated reactions from investors. An official from Korea’s Korean Won Exchange suggested that the transaction maintenance review is a continuation of existing procedures and not a sudden shift. The official explained, “The best practices for transaction support can be viewed as consolidating the review standards that each exchange has already implemented into a larger framework,” minimizing the likelihood of mass removals.
Furthermore, the exchange addressed the propagation of baseless rumors regarding potential delistings. Officials highlighted that such lists have circulated previously, often targeting ‘Kimchi Coins’ due to their substantial domestic trading volume.