South Korean exchanges shed altcoins to appease banks, government

South Korea’s largest crypto exchange Upbit could well have blood on its hands after it effectively condemned at least 30 altcoins to death in an effort to comply with harsh new government measures.

South Korean crypto exchange Upbit could be forced to snuff at least 30 altcoins from its platform to comply with harsh new government measures, reports The Korea Herald.

Last week, Seoul-based Upbit (South Korea’s biggest exchange by daily volume) recently culled five cryptocurrencies — Maro (MARO), Paycoin Protocol (PCI), Observer (OBSR), Solve.Care (SOLVE) and Quiztok (QTCON).

Upbit placed another 25 tokens on its investment warning list (the first stop on the way to delisting).

An Upbit announcement explained it’s tough on altcoins that don’t make the grade for team competency, feasibility, transparency, technical capability, and global liquidity.

The news sent some of the tokens spiralling — QTCON fell 98%, OBSR and MARO dropped 66%, and SOLVE sunk 50%.

Probit to Upbit: Hold our beer

Upbit isn’t alone in taking stringent action. In fact, the exchange’s 30 delistings pale in comparison to smaller outfit Probit, which called time on 145 digital assets.

South Korean banks will soon carry responsibility for illegal activity on crypto exchanges (like money laundering) they do business with.

In May, Protos shared news of Korea Federation of Bank’s warning to platforms that supporting trade for too many smaller cryptocurrencies presented insurmountable risk for local institutions.

Back then, local media noted altcoin markets made up 95% of trade volume on South Korean crypto exchanges.

Weeks earlier, reports indicated up to 100 exchanges could close by August’s end if they don’t secure banking partnerships in time.

  • If authorities uncover illicit crypto activity on exchanges, the banking partner would be responsible.
  • The government will be within its rights to fine banks for non-compliance.
  • Penalties could even be dished out retroactively.

So, these recent mass delistings come as exchanges across the country scramble to get in line with looming crypto legislation.

With this in mind, it’s no surprise that South Korean banks are pushing a no-risk approach to dealing with local exchanges.

Many smaller cryptocurrencies are now cut adrift. Upbit rejects Quiztok, Observer, Paycoin, and Maro all found overwhelming majorities of their trade volumes on Upbit directly.

Thai platforms face same fate as South Korean exchanges

South Korea isn’t the only country taking steps to ensure crypto-related activity on home turf is above board.

Last weekend, Bangkok Post reported the Thai Securities and Exchange Commission outlawed meme-based crypto, NFTs, and tokens issued directly by crypto exchanges.

[Read more: South Korean banks still refuse to help most crypto exchanges]

Thailand’s effort is to crack down on currencies that exhibit certain characteristics, like “no clear objective or substance” or owing their value to celebrity endorsement.

Echoing South Korea, crypto exchanges supporting Thai traders have less than a month to ensure all listed tokens comply with their government’s new rules — or face regulators forcibly delisting them.

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