Newly Listed Coins Volatile... Upbit "Market Freedom" Just Watching

12 Cryptocurrency Listings After Enforcement of the Revised Special Financial Transactions Act
Experts Point Out "Exchanges Earning Commission Revenue Must Protect Investors"

[Asia Economy Reporter Gong Byung-sun] Domestic cryptocurrency exchange Upbit is increasing the listing of cryptocurrencies following the enforcement of the amended Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Transaction Information Act, or Specified Act).

According to the industry on the 23rd, since the enforcement of the amended Specified Act on September 25, Upbit has listed 12 cryptocurrencies in total, combining both the KRW market, where trading is possible with Korean won, and the Bitcoin market, where trading is possible with cryptocurrencies such as Bitcoin. This number exceeds the 11 cryptocurrencies listed by the other four major cryptocurrency exchanges (Bithumb, Coinone, Korbit).

Before the enforcement of the Specified Act, Upbit was the most cautious exchange in deciding cryptocurrency listings. From May to September, Upbit managed the cryptocurrency market without listing a single cryptocurrency. During the same period, Bithumb listed 78, Coinone 45, and Korbit 38 cryptocurrencies.

The problem is that Upbit’s rapid increase in listing decisions after the enforcement of the Specified Act is leading to investor losses. The day before, Upbit newly listed Gitcoin and Ocean Protocol on the Bitcoin market. Although the Bitcoin market accounts for only 3.2% of Upbit’s daily trading volume and is relatively small in scale, each coin fell by 36.90% and 22.66% respectively compared to their peak prices. Typically, the less investors flock to a cryptocurrency, the lower its volatility.

The situation is even more severe in the KRW market, where more investors gather. Near Protocol, listed on Upbit’s KRW market on the 15th, plummeted 84% from its peak. Near Protocol dropped more than 80% in less than a minute. Recently listed Algorand, 1inch Network, and Aave also showed declines of around 50% within 30 minutes.

Upbit’s operator Dunamu stated at a press briefing on the 14th that even if the listed cryptocurrencies show tremendous volatility, they should still not intervene in the cryptocurrency market. However, experts point out that cryptocurrency exchanges, which earn fees through cryptocurrency trading, should actively protect investors.

Professor Lee Byung-wook of Seoul School of Integrated Sciences and Technologies said, "If exchanges neglect the volatility of the cryptocurrencies they list while collecting fees, a conflict of interest arises," adding, "Because they resemble regulated financial institutions, they must actively resolve conflicts of interest." An anonymous industry insider said, "Overseas cryptocurrency officials react strangely to the volatility of cryptocurrencies listed on domestic exchanges," and emphasized, "Appropriate regulation is necessary for the healthy development of the cryptocurrency market."