Amid Strong Regulatory Action, South Korean Exchanges Warn About ‘Kimchi Coins’
Crypto exchanges in South Korea are having a tough time navigating through strong regulatory action initiated by authorities. As a resulted local crypto exchanges have started limiting services to some altcoins while classifying some as ‘kimchi coins’.
Kimchi Premium is one of the most popular terms used in the South Korean crypto market. Being one of Asia’s largest crypto trading markets, cryptocurrencies at South Korea-based exchanges trade at a premium over the global prices, called Kimchi Premium.
Earlier this month, popular crypto exchange Upbit flagged around 178 tokens as “coins to watch”. The crypto exchange noted that “their overall evaluation doesn’t meet internal standards and measures” to protect investors. Besides, Upbit also suspended trading in Korean won for some of the cryptocurrencies, reports Nikkei Asia.
The exchange said that the cryptocurrencies that could no longer be traded using Korean won were the “kimchi coins” like Paycoin. another popular Korean crypto exchange Coinbit also followed suit. It halted the trading in eight tokens while designating 28 others as tokens to be monitored.
The exchange operators noted that these measures are initiated to avoid any friction with the regulators. The coins that were removed from these popular exchanges started plummeting in value across the board. Investors and coin issuers have opposed the recent move from exchanges.
The Rising Regulatory Scrutiny
Earlier in March, South Korean regulators amended new regulations for crypto firms operating in the country. The regulator has asked exchanges to submit a report showing how they have adhered to the new regulatory requirements.
The authorities require exchanges to form a partnership with local banks in order to open accounts with real-name KYC verification.
Some coin issuers have expressed displeasure with the recent actions initiated by Korean exchanges. The developer of altcoin Pica filed a lawsuit in the Seoul Central District Court and is seeking to invalidate the suspension of trading by Upbit.
The developer has also accused Upbit of asking for additional payment in Pica coins over and above the listing fees. Upbit has rejected these allegations saying that the developer has been “maliciously spreading falsehoods” while adding that it would take legal actions.