Several top cryptocurrency exchanges in South Korea have engaged in a mass delisting of many of the altcoins they offer to foster their relationships with banks.
Crypto Exchanges Partnering With Banks
According to a Tuesday report by a local media outlet, South Korean exchanges are taking these steps to strengthen their chances of partnering with banks that offer real-name accounts for their virtual clients.
This new development comes just a few weeks after the country’s authorities demanded that crypto exchanges should report their activities to the Korea Financial Intelligence Unit (KoFIU).
To carry out the mandate, crypto exchanges will have to partner with banks that will issue real-name accounts for their customers, and failure to do this will result in the exchange shutting down.
However, based on a recent update from the Korean government, the more coins that an exchange offers, the more vulnerable it is to be used for money laundering and other crypto-related fraud.
Warnings Against Altcoins
Earlier in May, the Korean government began to look into the rapidly growing number of altcoins on the various crypto exchanges in the country. According to a previous report, the authorities showed deep concern over the trading of hundreds of altcoins with little to no value.
In Korea, crypto exchanges have the power to list and delist any coin of their choice at any time without any need for government approval.
As a result, over 100 alternative cryptocurrencies are traded on the major Korean exchanges. To appeal to public sentiments, these exchanges rush to list any coin that seems to be gaining traction within the crypto space, causing their trading volumes to sometimes exceed those of more recognized coins like bitcoin.
So to appeal to the banks for partnerships, local exchanges are delisting the lesser-known coins on their platform. Last Friday, Upbit, Korea’s largest exchange by trading volume, disclosed that it will delist 24 altcoins on June 28 while Bithumb already delisted four altcoins on June 17.
Coinbit delisted eight altcoins and put about 28 others on a warning list. Additionally, Probit delisted a total of 145 altcoins on its trading platform.