Cryptocurrency prices are displayed last week on screens operated by Bithumb, a local cryptocurrency exchange, in the Gangnam district of south Seoul. [YONHAP]
Local exchanges are reducing the number of cryptocurrencies they offer.
The country’s largest exchange by trading volume, Upbit, announced on Friday that 25 coins had been placed on their investment warning list, a first step before the coins were removed from the exchange. Smaller exchanges like Probit recently announced the cancellation of hundreds of coins.
The steps come as the exchanges hope to work with banks that agree to offer bank accounts on behalf of the actual trader for trading on the exchanges. After an amendment to the Law on Reporting and Use of Specified Financial Transaction Information went into effect in March, exchanges were given until September 24 to find banks that would continue to operate.
Banks have refused to offer so-called real name accounts for trading cryptocurrencies because they do not want to be responsible for potential money laundering and fraud related to crypto assets. Exchanges are ditching lesser-known, underperforming coins to shake off some risk and target banks and financial regulators as safer places to do business.
Among the 25 coins Upbit put on its watchlist were Komodo (KMD), AdEx (ADX) and Lbry Credits (LBC).
The exchange said in its announcement that the coins “did not meet internal guidelines in terms of technical proficiency and global liquidity of the coin,” and said it “decided that a measure should be taken to protect investors”.
“After issuing an investment warning, Upbit thoroughly reviews the digital assets for a week to decide whether or not to end the transaction support,” said the exchange.
Last week, Probit announced that it would remove 145 cryptocurrencies from trading. Trading in these coins was suspended last Tuesday at 3 p.m. The tokens can be paid out until September 1st.
After Upbit’s announcement on Friday, Komodo’s price plunged 19.23 percent from the previous trading day. The price fell another 11.36 percent on Saturday, before recovering slightly by 0.83 percent on Sunday at the time of going to press.
Upbit’s closing prices are based on prices at 9 a.m. as cryptocurrency trading runs 24 hours a day.
AdEx slumped 8.67 percent on Friday, 16.27 percent on Saturday and another 4.86 percent on Upbit on Sunday.
BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]
