Cryptocurrency Exchanges Organizing Ahead of Draft Amendment to Special Financial Transactions Act Enforcement Decree
Investors Bear the Full Brunt of Losses
Self-Issued Cryptocurrencies Also Difficult to Trade on Other Exchanges
[Asia Economy Reporter Gong Byung-sun] “There is not a single word of responsibility.” Mr. A, who invested 20 million won in ‘Gidac Token’ issued by the domestic cryptocurrency exchange Gidac, could not contain his anger, saying he lost his money in an instant. On the 9th, Gidac suddenly announced that it would delist Gidac Token. He said, “I invested because I trusted the exchange called Gidac from the beginning, but I didn’t expect the delisting,” adding, “I don’t understand why they don’t take responsibility with compensation plans when delisting their own issued cryptocurrency.”
Ahead of the amendment to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Information Act), cryptocurrency exchanges have started filtering out junk coins to survive. However, investors continue to suffer damages during this process, raising voices that exchanges should take responsibility.
The Financial Services Commission announced the legislative notice for the amendment to the Enforcement Decree of the Specified Financial Information Act until July 26. According to the amendment, exchanges cannot self-list or trade cryptocurrencies they have issued themselves. In addition, exchanges and their executives and employees are prohibited from trading on their own exchanges.
As regulations tighten, recent cryptocurrency delistings by exchanges have been continuous. On the 18th, Upbit, a major domestic cryptocurrency exchange, announced the delisting of 24 cryptocurrencies. Bithumb also announced on the 17th that it would suspend trading support for four cryptocurrencies. The same applies to small and medium-sized exchanges. Gidac announced on the 9th that it would delist its self-issued Gidac Token. Currently, Gidac Token cannot be traded on Gidac. Coinbit also announced on the 15th that it would delist eight cryptocurrencies related to the exchange at once.
Earlier this year, exchanges gained popularity with coins issued by domestic companies, so-called Kimchi coins, and self-issued coins. For example, Paycoin, whose Korean won trading was suspended on Upbit, attracted investors’ attention by soaring 1628.72% on February 17 alone. Aurora, which Bithumb announced to suspend trading support for, was in the 1,000 won range earlier this year but surged to around 13,000 won in April. Small and medium-sized exchanges tried to attract investors by promoting self-issued cryptocurrencies through events.
Investors who made investments are in a state of bewilderment. Although exchanges promote themselves as trustworthy, their hasty delisting actions make them completely untrustworthy. Mr. B, who started investing in cryptocurrencies earlier this year, said, “I understand that the delisting is due to the amendment to the Enforcement Decree of the Specified Financial Information Act and can accept it,” but added, “Investors are curious about the criteria used to list the cryptocurrencies that were delisted this time.”
Investors pointed out the need for responsibility from cryptocurrency exchanges. In cryptocurrency communities, there were strong voices that exchanges should at least apologize since they made significant profits from the delisted cryptocurrencies. Meanwhile, opinions were also raised that exchanges promoting self-issued cryptocurrencies should provide corresponding compensation plans. Since self-issued cryptocurrencies cannot be traded on other exchanges, the scale of damage is even greater.
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