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Ahead of the implementation of the Virtual Asset User Protection Act next month, the Financial Supervisory Service (FSS) has announced a comprehensive review of 600 domestic virtual assets. This announcement led to massive panic selling among investors, causing a sharp decline in the prices of many altcoins, especially those labeled “Kimchi Coins.”
According to the local reportThe FSS revealed that, starting next month, it will conduct quarterly reviews of virtual assets listed on local exchanges. This process is intended to ensure that all listed currencies meet strict list maintenance standards. The impending revisions have sparked widespread fear among investors, leading to excessive selling.
On the 18th, the virtual asset industry reported that 16 altcoins had been identified as being at risk of delisting. This speculation, which spread mainly through social media and currency communities, led to a 10-20% price drop for about half of the coins listed on the KRW market.
Review standards and investor interests
The FSS’s audit standards are classified into formal and qualitative requirements. Formal requirements include reliability of the issuer, user protection measures, technology security, and legal compliance. Qualitative requirements focus on the total release size, the distribution plan, and any changes to the business plan.
Despite investors’ concerns, the Financial Supervision Authority clarified its role in the review process. “The relevant information was additional materials submitted to the National Assembly when the National Assembly enacted the Virtual Assets Law earlier,” the Financial Supervisory Authority’s Virtual Assets Supervision Office stated, stressing that the FSS does not directly review virtual asset transactions. .
The virtual asset exchange attributed the recent price declines to investors’ overreaction. An official from the Korean Won Exchange noted that the transaction maintenance review was a continuation of existing practices, rather than a sudden change. “Best practices for supporting transactions can be viewed as consolidating the audit standards implemented by each exchange to date into one within a larger framework,” the official explained, reducing the likelihood of mass delistings.
In addition, the stock exchange addressed the spread of unfounded rumors about possible delistings. Officials noted that such listings have circulated in the past, often targeting “kimchi coins” due to their high domestic trading volume.
