Analysis of data from 5 major won-based exchanges

'1,236 listings, 430 delistings over 4 years'

Exchanges boosted trading volume through new listings, zero-fee events

Financial authorities must put investor protection first, lawmaker says

People Power Party lawmaker Park Sung-hoon. [Provided by Park Sung-hoon's office]
People Power Party lawmaker Park Sung-hoon. [Provided by Park Sung-hoon's office]

Domestic virtual asset exchanges are listing and delisting coins at a growing pace, with critics warning Monday that investor protections remain inadequate.

According to data obtained by People Power Party lawmaker Park Sung-hoon from South Korea's five major won-based exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — the platforms collectively listed 1,236 altcoins (including duplicates across exchanges) from 2022 through the end of July this year, with Bithumb's figures extending through Aug. 18.

The surge in new listings has been matched by a wave of delistings. Park's office said 430 virtual assets had their trading support terminated over the same period. While the figure includes coins listed before 2022, it represents 34.8 percent of the new listings made during that span.

Thirty-eight coins failed to survive even a year after listing. By exchange, Bithumb recorded the most at 16, followed by Coinone with 11, Gopax with 5, Korbit with 4 and Upbit with 2.

The delisting rate in the virtual asset market stands out sharply against the stock market. Park's office said that over the same period, 532 companies were newly listed on Kosdaq while 76 were delisted for reasons including failing to meet audit opinion requirements.

Zero-fee competitions among exchanges have also produced sharp spikes in short-term trading volume. Korbit waived transaction fees on all coins for roughly five months from October 2023 through February 2024, and daily average trading volume during the event jumped 1,520.8 percent to 70.66 billion won ($51.3 million) compared with the equivalent period before the promotion. Once the event ended, daily average trading volume fell back to 30.1 billion won.

The pattern that has emerged is one in which exchanges attract investors through new listings, inflate trading volume with zero-fee promotions, then delist coins once problems surface — leaving investors to absorb losses from sharp price drops, critics in the political arena say.

"If exchanges tout rosy outlooks at listing time to draw in trading activity, then delist coins the moment trouble arises, investors are in effect left holding the bag at the end of a game of hot potato," Park said. "We can no longer turn a blind eye to this 'coin listing feast' that fattens the exchanges while investors are left bearing the losses."

Park added that financial authorities must scrutinize the entire process from listing to delisting and establish strict standards that prioritize investor protection over competition for trading volume.


raining@heraldcorp.com