Cryptocurrency exchanges are delisting or issuing investment warnings on unverified altcoins, embarking on a “coin cleaning.” The exchanges seem to be removing bad coins to meet the requirements for their registration to financial authorities by September 24 in accordance with the Act on Reporting and Using Specified Financial Transaction Information.
According to the cryptocurrency sector on Wednesday, 11 of 20 cryptocurrency exchanges with an information security management system (ISMS) certification announced the delisting of or issued transaction warnings on coins since the pan-governmental cryptocurrency transaction management plans were announced on May 28.
UPbit with the largest transaction volume delisted five cryptocurrencies in the Korean Won market and issued warnings on 25 coins on Friday. Coinbit made an announcement on Tuesday at 10 p.m. that it will delist eight cryptocurrencies and issue warnings on 28 coins.
In addition, Huobi Korea and GDAC delisted coins named after each exchange, along with other small- to medium-sized exchanges’ efforts to clean their coins.
However, confusion is growing among investors as there is no clear legal basis for delisting cryptocurrencies. Most exchanges point to unmet internal qualifications or investor protection as the reasons for delisting. It is also problematic that some exchanges make such announcements late at night. The delisted or warning-issued coins drop 70 to 80 percent in price overnight while investors are unable to respond.
The industry believes that the delisting trend will continue for a while. “Filtering unverified altcoins is an issue directly related to the survival of a cryptocurrency exchange,” said a member of an exchange. “We are making delisting decisions based on foreign exchanges’ examples.”