A comprehensive investigation of South Korea’s five major won-denominated cryptocurrency exchanges (Upbit, Bithumb, Coinone, Korbit, and GOPAX) has revealed a troubling trend in the domestic virtual asset market.
According to data submitted via an exclusive press report earlier today, out of 1,482 virtual assets listed between January 2018 and August 2024, a staggering 517 tokens (34.9%) have been delisted.
The delisting numbers indicate a completely different environment from the traditional stock market, with the Korea Exchange (KOSPI) reporting zero delistings in the same seven year period, a stark contrast to cryptography in South Korea.
Timeline and Duration Analysis
The patterns this looks show it reveals concerning ways around the longevity of listed cryptocurrencies on Korean exchanges. On average, over 500 delisted virtual assets took nearly 750 days (2 years and 18 days) to get listed.Â
Yet more alarming, 279 tokens (54.0%) were never able to maintain its listing status for even two years, let alone quickly delisted tokens (107 tokens with 20.7% delisted tokens in first year).
The most extreme case was ‘DigixDAO (DGD)’, which was delisted from Upbit after just 77 days, leading to industry criticism about inadequate verification processes and indiscriminate listing practices by exchanges accepting tokens from overseas markets.
Regulatory Environment and Market Impact
Despite the implementation of the ‘Virtual Asset User Protection Act’ in July, significant concerns remain about investor protection in the Korean cryptocurrency market. The current regulatory framework allows exchanges to maintain autonomous control over listing decisions, with vague and inconsistent standards leading to mass listings followed by rapid delistings.Â
This creates a particularly volatile market environment where newly listed assets often experience dramatic price increases of up to 100% immediately after listing, followed by rapid fund movements that frequently result in substantial losses for investors.
The daily trading volume in the domestic virtual asset market, reaching approximately 3 trillion won, underscores the magnitude of potential investor exposure to these risks.
Also Read: Bybit Announces New Listing And Delisting Standards To Enhance Market Integrity
Expert Analysis and Future Implications
Industry experts, including Professor Hwang Seok-jin from Dongguk University’s Graduate School of International Information Protection, have raised serious concerns about the exchanges’ failure to fulfill their basic obligations in reviewing listing criteria while continuing to collect fees.
The current situation places the entire burden of losses during the listing and delisting process on investors, with many virtual assets listed through rule-based systems failing to recover initial investments.
The absence of proper listing review processes, combined with the significant daily trading volume in the Korean virtual asset market, has led to calls for enhanced measures to reduce investor damages during the delisting process.
This crisis highlights the urgent need for more stringent regulatory oversight and standardized listing criteria in the Korean cryptocurrency market to protect investor interests and maintain market stability.