[Exclusive] 165 Disclosure Corrections at Top 5 Virtual Asset Exchanges... Coinone Says "No Data on Modification History" [Coin Lawless Zone] ①

165 Disclosure Corrections at the Five Major Virtual Asset Exchanges
Coinone: "No Data on Modification History"
Opaque Disclosure Management in the Virtual Asset Market
538 Investment Warnings and 394 Delistings in Five Years
Regulator

Editor's NoteWhile the second phase of virtual asset legislation (the Digital Asset Basic Act) remains stalled, institutional gaps have surfaced throughout the market. The Asia Business Daily will conduct an in-depth series of five reports diagnosing the current state of regulatory vacuums across the virtual asset market, including public disclosure, investigations into illegal transactions, recovery of criminal proceeds, and market surveillance, as well as the risks arising from these gaps.

"The hacking incident was immediately reported to overseas exchanges, but neither domestic exchanges nor users were notified or informed through a disclosure until four days had passed. There is considerable likelihood that they refrained from disclosure and notification out of concern that the coin’s price would fall." (May 30, 2025, Seoul Central District Court)

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In the virtual asset market, the disclosure system has lost its fundamental role of protecting investors, and is instead being exploited by issuers as a means to support prices. However, it has been confirmed that the management infrastructure of major regulated exchanges, which are supposed to monitor such practices, is virtually unprotected.

According to materials submitted by the office of Min Byungdeok, a lawmaker from the Democratic Party of Korea, to the Financial Supervisory Service as of July 6, there were a total of 165 disclosure corrections made by domestic virtual asset exchanges from 2022 through May of this year. By exchange, Upbit accounted for the majority with 117 cases, followed by Gopax with 39, Bithumb with 9, and Korbit with 0.

In particular, it was revealed that Coinone does not have any disclosure management system in place. Coinone stated, "We ask for your understanding as modification and deletion histories of announcements are not managed or stored as separate data within our systems, making it impossible to extract accurate statistics." In the stock market, disclosure corrections or deletions are designated as improper disclosures, and if demerit points accumulate, it leads directly to strict exit standards such as trading suspension or delisting reviews. However, in the virtual asset market, such issues have been left completely unchecked.

Not only is disclosure lacking, but the management of listings and delistings is equally loose. Over the past five years, there were a total of 538 cases in which assets were designated as investment warning items across the five major exchanges. By exchange, Coinone accounted for 196 cases, Bithumb for 150, Gopax for 90, Upbit for 53, and Korbit for 49. By year, there were 91 cases in 2022, 121 in 2023, 75 in 2024, and 141 last year. In the first five months of this year alone, there were 110 such warning items.

In reality, over the past five years, 394 coins have disappeared from the market after being delisted (support for trading terminated). By exchange, Coinone accounted for 150, Bithumb for 114, Gopax for 67, Upbit for 39, and Korbit for 24. During this period, the most common reason cited by domestic virtual asset exchanges for delisting was "project risk, such as poor management by the issuing foundation," with 155 cases. This was followed by "investor protection risk" with 108 cases, "market risk" with 56, and "technological risk" with 50.

The insufficient disclosure and frequent delistings in the virtual asset market are due to the prolonged deadlock over the second phase bill, the Digital Asset Basic Act, which is intended to regulate the market. Initially, financial authorities planned to announce a government proposal containing clear regulatory standards earlier this year, but the announcement has been postponed indefinitely due to a failure to coordinate differing opinions among regulators, lawmakers, and the industry. In particular, financial authorities are currently considering a plan to allow only consortia in which commercial banks hold more than '50% + 1 share' to issue won-backed stablecoins, while the fintech and virtual asset industries are demanding broader participation, citing concerns over weakened competitiveness. Furthermore, as authorities discuss limiting major shareholders’ stakes in virtual asset exchanges to a maximum of 34%, conflicts have intensified even more.

The Digital Asset Basic Act, which is currently pending in the National Assembly, specifies robust disclosure regulations. The bill stipulates that an issuer wishing to issue a digital asset must submit a registration statement regarding the issuance to the Financial Services Commission and may not issue the digital asset unless the registration is accepted, thereby fundamentally blocking the unauthorized issuance of so-called "ghost coins." Furthermore, if there are any false statements or omissions of material information in the registration statement and users of the digital asset suffer losses as a result, those responsible are held liable for compensation. In addition, the bill requires exchanges to establish business regulations, including standards for supporting and terminating the support of digital asset trading, and to make mandatory disclosures accordingly.

Jung Myungho, Senior Policy Advisor at the National Assembly’s Political Affairs Committee, stated in the bill review report, "With global efforts underway to establish digital asset systems, it is necessary for Korea to introduce a digital asset issuance system in order to foster a healthy blockchain industry ecosystem within an appropriate regulatory framework and to enhance global compatibility and consistency of digital asset policies. In this respect, the bill is a necessary legislative action."

However, there are also opinions that applying disclosure and delisting systems from the stock market to the virtual asset market faces practical limitations. An industry insider who requested anonymity said, "In the case of small exchanges, they often lack bargaining power with issuing foundations, so even if they request disclosure information, they frequently do not receive it." The high number of delistings at Coinone, they explained, is not due to market weakness, but rather the result of sorting out poorly listed coins in accordance with the model guidelines for virtual asset trading support developed by the Digital Asset eXchange Alliance (DAXA).

Experts point out that the current structure, which relies solely on self-regulation without legal oversight, has its limits. Hwang Seokjin, a professor at Dongguk University Graduate School of International Information Security, commented, "Conflicts of interest at exchanges, a lack of standardized disclosure criteria, and ineffective sanctions collectively undermine investor protection and market trust. It is important to design a regulatory system that reflects the unique characteristics of virtual assets by establishing shared responsibility between issuers and exchanges, ensuring ongoing disclosure obligations, defining what constitutes critical information, and implementing effective sanctions."

Kim Minseung, head of Korbit Research Center, stated, "While maintaining self-regulation, a basic law for industry development is necessary. If the first phase of legislation defined what must not be done, the second phase should clarify, from a legal perspective, what is permitted to foster industry growth."

This content was produced with the assistance of AI translation services.