[Exclusive] Countless Coins Worth Less Than 1 Won... 110.8 Billion Coins Unclaimed After Delisting

[Frozen Coin Investment]②Rapid Increase of Coins Left Idle in 4 Major Exchanges
"Need to Revitalize by Allowing Corporate and Institutional Investments"

It has been revealed that a significant number of coins delisted (trading support terminated) from major domestic virtual asset exchanges remain unclaimed by investors. According to data obtained from the office of Yoon Young-duk, a member of the Democratic Party of Korea, among the coins delisted from the four major exchanges excluding Upbit (Bithumb, Coinone, Korbit, and GOPAX) from 2020 to August this year, the amount still not withdrawn reached 110.8 billion coins.

Coins Unclaimed Despite Being Untradeable Due to Delisting Accumulate

At Bithumb, the remaining quantity of coins delisted from January to the end of August this year totaled 8,814,577,203 coins. This represents a 38.53% increase compared to last year's total of 6,363,067,520 coins. The figures had been decreasing from 12,981,625,410 coins in 2020, 8,034,317,091 coins in 2021, and 6.3 billion coins in 2022, but have risen again this year.

For Coinone, the remaining quantity as of the end of August this year was 24,819,888,386 coins, similar to last year's total of 25,198,244,023 coins. Unlike Bithumb, the numbers have increased annually from 525,607,194 coins in 2020, 18,799,223,712 coins in 2021, to 25.1 billion coins in 2022. Especially, if an additional 378,355,637 coins are added during the remaining four months of this year, it will mark the third consecutive year of growth.

At GOPAX, the figures were 396,668,594 coins in 2021, 2,034,236,573 coins in 2022, and 903,364,252 coins up to August 2023. Korbit recorded only 62 coins in 2020, but after Luna and WEMIX coins were delisted in 2022, the remaining quantity surged to 1,914,564,666 coins. However, this year, only OmiseGO and Serum were delisted by August, totaling just 100,039 coins. Upbit, the largest domestic exchange, responded to the inquiry about the status of coins with terminated trading support and completed withdrawals since 2020 by stating "no such cases." It is presumed that Upbit also has virtual assets remaining that customers have not withdrawn after trading support ended.

Reflecting the Cooling Coin Investment Sentiment

Exchanges announce a withdrawal period after deciding to delist a coin. However, even after this period expires, most exchanges are known to continue supporting withdrawals for coins with terminated trading support. A Coinone representative stated, "We provide virtual asset withdrawal guidance through notices at the time of trading support termination, and even afterward, if customers request the return of the virtual assets, we support withdrawals." Korbit processes withdrawals once a month upon verification of the withdrawal wallet address and payment of a processing fee, while Bithumb returns coins twice a month to other exchanges or personal wallets for a fee of about 30,000 KRW.

Although investors can reclaim their coins even after the withdrawal period announced by the exchange has passed, it involves high fees and inconvenience as immediate withdrawal is not possible. Additionally, since trading support has ended, buying and selling on the exchange is impossible.

Nonetheless, the fact that investors do not claim their virtual assets indicates that investment sentiment toward coins has frozen. Last year, the 'Crypto Winter' led to a sharp decline in the number of investors using exchanges. According to the Financial Intelligence Unit (FIU) under the Financial Services Commission, the number of accounts registered with virtual asset traders decreased by about 10%, from approximately 13.1 million in the first half of last year to 11.78 million by year-end. Although the price of Bitcoin, a representative virtual asset, rose from the $16,000 range to the $26,000 range this year, the increase was limited due to sustained high interest rates and regulations by the U.S. Securities and Exchange Commission (SEC), falling short of the interest seen when it surged to the $64,000 range in June 2021.

Moreover, coins with terminated trading support often experience a sharp price drop, effectively becoming 'worthless scraps,' providing little incentive for investors to reclaim them despite fees. According to the global virtual asset market data site CoinMarketCap, Zenotoken, delisted from Bithumb on May 8, was trading at $0.00034 (about 0.45 KRW) at the time of trading support termination and has since fallen continuously to $0.000093 (about 0.12 KRW) as of the 19th of this month. As of the end of last month, the remaining quantity of Zenotoken on Bithumb was 739,518,692 coins. CryptoBank, with 2,721,118,005 coins remaining on Coinone, was valued at $0.0000016 and has recorded zero trading volume since June 13.

People Leaving the Coin Market... Exchanges Face Performance Concerns

As more people leave the coin market, a 'dark cloud' looms over exchange performance. Dunamu, which operates Upbit, reported sales (operating revenue) and operating profit of 491.5 billion KRW and 298.5 billion KRW respectively in the first half of this year, sharply down 37.4% and 47.3% from 785 billion KRW and 566 billion KRW in the same period last year. Dunamu explained, "The decline in sales is mainly due to reduced global liquidity and prolonged economic recession, which have dampened investment sentiment."

Bithumb's sales for the first half of this year were 82.7 billion KRW, down 59.6% from last year, and operating profit was 12.8 billion KRW, down 89.6%. However, Coinone, ranked third in domestic market share, recorded a loss of 877.8 million KRW in the first half of this year.

Each exchange is making strenuous efforts to attract customers and increase trading volume by holding events. Bithumb is currently offering new customers who deposit at least 1 KRW Bithumb Cash worth 20,000 KRW. Coinone and Korbit are also running referral reward events. Additionally, they are updating order functions and simplifying login processes. Coinone introduced 'Quick Order' and an order function in the app's order book for faster ordering with a single selection. Korbit completely revamped its login and registration system to a passwordless method.

Despite these efforts, it is expected that exchanges will find it difficult to avoid performance deterioration this year. An industry insider said, "Interest in coin investment is waning and the economic situation is unfavorable, so there are even talks that Bithumb might post a loss this year. Given the situation in the KRW market, exchanges with even less liquidity in the coin market may start closing one by one," expressing concern.

Exchanges are showing interest in other businesses or cutting costs. Dunamu announced a paid-in capital increase of 5 billion KRW for its subsidiary Viver, a platform for trading secondhand luxury watches. Dunamu's investment specialist company Dunamu & Partners disposed of its stake in the entertainment company Leu after two years. Bithumb also disbanded its research center, Bithumb Economic Research Institute, just over a year after its launch in June.

Experts suggest that ways to supply liquidity to exchanges should be considered. Professor Hwang Seok-jin of Dongguk University's Graduate School of International Information Security said, "As the crypto winter is lasting longer than expected, exchanges are facing difficulties due to reduced fee income, and this hardship is expected to continue for some time. It is worth discussing measures to allow corporate or institutional investments and the launch of derivative products."