- South Korea is gearing up to implement the Virtual Asset User Protection Act on 19 July 2024.
- This has raised concerns about new “Virtual Currency Trading Guidelines” and their impact on investors.
- There is significant apprehension about the potential delisting of altcoins.
South Korea’s new Virtual Asset Trading Guidelines could reshape the cryptocurrency market, sparking concerns over potential altcoin delistings.
Financial Authorities to Introduce New Guidelines
In anticipation of the Virtual Asset User Protection Act, the Financial Supervisory Service (FSS) will unveil “Virtual Asset Trading Support Best Practices.” These guidelines will provide domestic exchanges with standards to maintain cryptocurrency trading support. The aim is to implement these practices promptly, potentially before the legislative deadline, enhancing market reliability and credibility.
Potential Impact on Altcoin Listings
Investors are wary that the introduction of these guidelines may trigger widespread altcoin delistings, reminiscent of the events in 2021. At that time, Upbit, one of South Korea’s largest exchanges, suspended support for 24 virtual currencies due to various issues, leading to significant price drops and market instability.
Improved Market Conditions Since 2021
Since the mass delistings in 2021, the overall reliability of the cryptocurrency market has increased. Exchanges like Upbit have assured investors of regular maintenance reviews and transparent criteria. This has led to a more stable market environment, reducing the likelihood of massive delistings. Still, there’s caution about the new guidelines causing abrupt delistings, especially for cryptocurrencies facing security or transparency issues.
Mixed Reactions from Industry Experts
Some experts believe that concerns over the new guidelines might be amplified. They argue that, while there could be delistings of underperforming cryptocurrencies, these guidelines might actually strengthen market credibility. Kim Ji-won, a researcher at KB Securities, suggests that these practices could act as self-regulatory measures, supporting the Virtual Asset User Protection Act and ultimately purifying the market.
Conclusion
The forthcoming Virtual Asset User Protection Act and associated guidelines mark a pivotal moment for South Korea’s cryptocurrency market. While there’s apprehension about potential altcoin delistings, the move could foster a more robust and credible trading environment. Stakeholders await the official guidelines, which are expected to set new standards for trading support and maintain market stability.
