“We don’t have much control over exchanges”
Lee Bok-hyun, the head of South Korea’s Financial Intelligence Unit, responded to criticism from the National Assembly’s parliamentary affairs committee that domestic virtual asset exchanges are allowing prices to fall after listing a large number of burger coins.
“Under the current system, we don’t have much control over the exchanges,” he said. “Even now, we have asked DAXA (Digital Asset Exchange Association) to conduct activities to gain consumer trust. If there are problems such as manipulation of circulation through staking or unfair disclosure, we will consider measures with DAXA after confirmation.”
“However, without the cooperation of voluntary exchanges, it is difficult to take enforcement measures due to current institutional limitations.” In particular, “If there are problems related to Burger Coin, we will be well prepared to take action immediately from July next year when the Virtual Asset User Protection Act is implemented.”
Burger Coin damage cases in South Korea
On the 17th, the Financial Supervisory Service’s national audit mentioned cases of Burgercoin damage. Min Byung-duk, a member of the Democratic Party of Korea, pointed out that “so-called ‘burger coins’ issued overseas and traded in Korea are generating huge fee income, but domestic cryptocurrency exchanges are not willing to protect investors.” He added, “Upbit, for example, earned 44.8 billion won($33M) in transaction fees alone after listing 12 burger coins.
Investors, on the other hand, are suffering massive losses due to the decline in coin prices. Some of these burger coins have seen a price drop of up to 94%. After the Terra-Luna debacle last year, exchanges competitively listed overseas “burger coins” instead of locally made so-called “kimchi coins” and allowed their prices to fall, which is hurting domestic investors. While exchanges are pursuing their own interests in this way, the Financial Supervisory Service is turning a blind eye to investor damage, claiming that self-regulation is a priority.”
SUI, a representative damage case
Representative Min cited Sui (SUI) coin as a prime example of a bugaboo coin, which has fallen nearly 70% since its listing.
“The Sui Foundation, which issued the coin, manipulated the coin in an unfair way through staking and sold it to the market, causing the price to continue to decline, and secretly sold it after depositing the issued coins and receiving the reward coins. It is estimated that domestic investors have lost tens of billions of won due to the falling price of the Sui coin while there was no DAXA-level response. Meanwhile, Upbit earned 3.9 billion won in fees last month alone.”
Here’s his alternative
“While securities are issued, registered, and traded on the stock market, coins are listed and delisted by individual exchanges. Exchanges should be transparent about how they decide to list and delist, and they should be required to follow up. Financial regulators need to come up with a way to separate coin listings.”
What are Burger Coins?
Burger coins are coins that are created overseas and traded domestically. In contrast, kimchi coins are issued by domestic companies.
Terms like burgercoin and burger token are often associated with fraudulent projects or investment scams, and investors should be wary of these projects. Careful research and information gathering is required before purchasing or investing in a legitimate cryptocurrency or token, and it is important to trade on an official and trusted cryptocurrency exchange. Cryptocurrency investments are considered high-risk, high-return investments and require careful judgment and independent research.
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