Upbit warning on digital coins sends prices diving

Digital coins that were flagged for delisting and given warnings by South Korea’s largest digital asset exchange Upbit plunged over the weekend as financial regulators tightened its grip on the cryptocurrency market.

The double-digit plunge in prices came after Upbit on Friday announced that it planned to halt the trading of five digital tokens while issuing “investment warning” on 25 cryptocurrencies.

Maro, Paycoin, Observer, Solve.Care and Quiztok will be delisted from the exchange from Friday noon. Upbit said the coins did not meet internal standards on maintaining the fairness of the market.

Following the announcement, all five coins set to be removed from the exchange, plummeted over the weekend. Maro, for instance, fell more than 70 percent from about 285 won ($0.26) on Friday to about 79 won as of Sunday afternoon, while Paycoin more than halved from 1,170 won to 428 won during the same period.

The country’s biggest exchange by trading volume issued investment warnings on 25 digital coins, or 14 percent of the total 178 coins listed on the platform. A digital token flagged with an investment warning faces a review this Friday, when the exchange will make a final decision on the coin if it can stay or will have to be delisted.

Upbit’s announcement came as the company and many other crypto exchanges face on-the-spot consultations from the government. The Financial Intelligence Unit (FIU), an agency tracking unlawful flows of funds under the Financial Service Commission, on Thursday told 33 crypto exchanges that it will conduct a field consultation before Sept. 24, by then which they are expected to comply to the Specific Financial Information Act. 

Meanwhile, the Financial Services Commission, which is in charge of managing and supervising digital assets, has formed five task forces led by the FIU, according to local media reports on Sunday.

The five task forces are Daily Situation Group, Reporting and Response Group, On-the-spot Consulting Group, Capital Market Group and System Improvement Group.

The daily situation group monitors the cryptocurrency market, and the reporting team supports the registration reporting of cryptocurrency exchanges. On-site consulting teams advise exchanges that wish to report registration. The system improvement team works with the National Assembly to create measures to improve the cryptocurrency system.

Led by the FIU, the five task forces to conduct the full-scale consultations will be the Financial Supervisory Service’s anti-money laundering office, Korea Exchange Securities Market Headquarters, Korea Securities Depository, Korea Federation of Banks, and Koscom.

By Park Ga-young (gypark@heraldcorp.com)