South Korea's five major cryptocurrency exchanges recorded 165 disclosure corrections from 2022 to May of this year, with Coinone revealing it maintains no systematic tracking of modification history, according to Financial Supervisory Service data submitted to lawmaker Min Byung-deok's office. The disclosure management failures stem from a prolonged regulatory vacuum as the Digital Asset Basic Act remains stalled over disputes regarding stablecoin issuance rules and exchange ownership caps. A Seoul Central District Court ruling on May 30, 2025 highlighted the investor protection risks, stating a crypto issuer delayed hack disclosure for four days domestically while immediately notifying overseas exchanges. The court found the delay likely aimed to prevent price declines, illustrating how disclosure systems function as price defense tools rather than investor safeguards in the absence of binding regulations. South Korea's stock market enforces strict delisting standards for disclosure violations, but crypto exchanges operate without equivalent oversight infrastructure.
Upbit Records 117 Disclosure Corrections, Coinone Lacks Tracking System
Upbit accounted for 117 of the 165 total disclosure corrections from 2022 to May of this year, representing the majority of amendments across the five exchanges. Gopax followed with 39 corrections, Bithumb recorded 9, and Korbit reported zero corrections during the period. Coinone stated in its response to the Financial Supervisory Service that "modification and deletion history of announcements is not systematically managed as data, making accurate statistical extraction impossible." The absence of tracking infrastructure at Coinone contrasts sharply with stock market protocols, where disclosure corrections trigger penalty points that can lead to trading suspensions or delisting reviews.
Five Exchanges Delist 394 Coins Over Five-Year Period
A total of 394 coins were delisted from the five major exchanges over the recent five-year period, with Coinone accounting for 150 delistings, Bithumb 114, Gopax 67, Upbit 39, and Korbit 24. Investment caution designations totaled 538 cases during the same timeframe: Coinone 196 cases, Bithumb 150, Gopax 90, Upbit 53, and Korbit 49. Annual caution designations rose from 91 in 2022 to 121 in 2023, dropped to 75 in 2024, then surged to 141 last year. From January to May of this year, 110 caution designations were issued. Exchanges cited "issuing foundation insolvency and project risks" as the most common delisting reason (155 cases), followed by "investor protection risks" (108 cases), "market risks" (56 cases), and "technical risks" (50 cases).
Digital Asset Basic Act Stalls Over Stablecoin Issuance Disputes
Financial authorities originally planned to announce a government draft of the Digital Asset Basic Act in early this year but indefinitely postponed the release due to unresolved disagreements among regulators, lawmakers, and industry participants. Authorities are considering restricting Korean won-denominated stablecoin issuance to consortiums where commercial banks hold "50% + 1 share" or more, while fintech and crypto industry representatives demand broader participation eligibility citing competitiveness concerns. Additional tensions emerged as authorities discussed capping exchange major shareholder stakes at 34%. The legislative deadlock leaves the market without binding rules on disclosure standards, listing criteria, and enforcement mechanisms.
Proposed Bill Mandates Disclosure Filings and Liability Provisions
The Digital Asset Basic Act currently pending in the National Assembly specifies that issuers must submit and receive approval for digital asset issuance filings with the Financial Services Commission before issuing tokens. The bill states that if important matters in the issuance filing contain false statements or omissions causing user losses, responsible parties must compensate for damages. Exchanges would be required to establish and publicly disclose business regulations covering digital asset trading support and termination criteria. Jeong Myeong-ho, senior counsel at the National Assembly's Political Affairs Committee, wrote in the bill review report that "introducing a digital asset issuance system in South Korea is a necessary legislative measure to foster a sound blockchain industry ecosystem within an appropriate regulatory framework and enhance global alignment of digital asset regulations."
Experts Cite Self-Regulation Limits, Call for Tailored Framework
Hwang Seok-jin, professor at Dongguk University's Graduate School of International Information Security, stated that "conflicts of interest at exchanges, non-standardized disclosure criteria, and lack of effective sanctions are creating vulnerabilities in investor protection and market trust." Hwang emphasized the importance of "designing a regulatory system that reflects the characteristics of digital assets by establishing responsibility-sharing between issuers and exchanges, continuous disclosure obligations, scope of material information, and effective enforcement tools." Kim Min-seung, head of Korbit Research Center, remarked that "while maintaining self-regulation, a basic law for industry development is needed — if the first legislation defined 'what not to do,' the second legislation must clearly draw legal boundaries for 'what is permissible' to foster the industry." An anonymous crypto industry official noted that smaller exchanges often lack negotiating power to obtain disclosure information from issuing foundations, and that Coinone's high delisting count reflects cleanup of poorly vetted legacy listings rather than market deterioration, aligning with Digital Asset Exchange Alliance (DAXA) best practice standards.
FAQ
How many disclosure corrections did South Korean crypto exchanges make from 2022 to May of this year?
South Korea's five major cryptocurrency exchanges recorded 165 disclosure corrections from 2022 to May of this year, according to Financial Supervisory Service data submitted to lawmaker Min Byung-deok's office. Upbit accounted for 117 corrections, Gopax 39, Bithumb 9, and Korbit zero. Coinone stated it does not systematically manage modification and deletion history as data, making statistical extraction impossible.
Why did the Seoul Central District Court rule against delayed hack disclosure on May 30, 2025?
The Seoul Central District Court ruled on May 30, 2025 that a crypto issuer immediately notified overseas exchanges of a hacking incident but delayed domestic disclosure and user notification for four days. The court found substantial likelihood that the delay aimed to prevent coin price declines, demonstrating how disclosure systems are exploited as price defense mechanisms rather than investor protection tools in the absence of binding regulations.
What are the key provisions of the proposed Digital Asset Basic Act?
The Digital Asset Basic Act pending in the National Assembly requires issuers to submit digital asset issuance filings to the Financial Services Commission for approval before issuing tokens. The bill mandates liability for damages if important filing matters contain false statements or omissions causing user losses. Exchanges must establish and publicly disclose business regulations covering trading support and termination criteria. The legislation remains stalled due to disputes over stablecoin issuance rules and exchange ownership caps.
