Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Ambiguous delisting rule sparks concern across crypto industry
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By Lee Min-hyung
By Lee Min-hyung
Investors are crying foul over an unclear delisting rule on certain cryptocurrencies, as they may end up facing unwanted financial losses when local crypto exchanges make abrupt decisions.
The latest in a series of such controversies erupted from the delisting of Arowana Token. The scandal-tainted cryptocurrency ― issued by Hancom, a local office software developer ― was delisted from the nation's second-largest exchange, Bithumb as of 3 p.m. Monday, after the token sparked a controversy that Hancom Chairman Kim Sang-chul was suspected of having created a slush fund by using Arowana.
The controversial token started to be traded in April 2021, but took the spotlight due to its wide price volatility. Its price soared by around 100,000 percent in around half an hour after its listing back then. Some investors are suspected of having engaged in price manipulation to reap undue profits. Last month, police raided the headquarters of Hancom to look into whether Kim and his close aides teamed up for the unfair trading.
Bithumb and Arowana Token's foundation exchanges a tit-for-tat over the latest delisting decision. Early this month, Arowana issued a statement that its foundation submitted specific documents to prove its business roadmap to Bithumb, but the exchange operator made what the foundation called the “unfair” decision in the end.
Bithumb, however, countered the argument, saying that it was tough for the exchange to determine that the foundation engaged in its business fairly and objectively according to the documents. Arowana is known to have filed a complaint to financial regulators against the delisting decision.
But the latest controversy has reignited a long-standing dispute that there are no specific legal criteria when exchanges decide to delist cryptocurrencies.
Industry officials also said crypto exchanges should be more willing to provide specific and convincing evidence to back up their decisions.
“It still remains questionable whether Arowana Token should be delisted at this specific period of time, even if it has been embroiled in a controversy during the past two years,” an industry source said. “To minimize potential losses of investors, regulators should waste no time in setting up specific guidelines as to the crypto delisting.”