Upbit, South Korea’s leading cryptocurrency exchange, has suspended deposits for Solve.Care (SOLVE), citing a lack of transparency and potential risks to investors.
The decision, communicated via an official announcement, highlights concerns over SOLVE’s business practices, including deficiencies in its distribution plan, changes in business strategy, and overall operational transparency.
SOLVE is designated as a “cautionary item” for a two-week review period. Upbit will evaluate whether to extend the designation, lift it, or terminate trading support during that time.
Upbit Suspends SOLVE: What’s Happening?
Upbit’s announcement detailed several factors that led to SOLVE’s designation as a cautionary item.
According to the exchange, a comprehensive review revealed significant deficiencies in several key areas.
Upbit expressed concerns over inconsistencies and a lack of transparency in the token’s issuance and distribution strategy, which could mislead investors about its true supply dynamics.
The exchange also flagged changes in SOLVE’s business direction, questioning the extent and procedural transparency of these modifications.
Additionally, SOLVE’s lack of clarity and rationality in its operational procedures raised alarms about the token’s sustainability and potential risks to investors.
The announcement emphasized that these issues could harm users, prompting Upbit to suspend deposits and issue an investment warning.
The designation period runs from January 10 to January 24, 2025. During this time, the exchange will decide on the token’s future trading support based on its “Digital Asset Trading Support Termination Policy.”
Implications for South Korean Investors Amid Growing Intrest In Crypto
The suspension has significant implications for both SOLVE investors and the broader cryptocurrency market in South Korea.
Investors holding SOLVE face uncertainty as they await Upbit’s final decision.
Deposits for the token have been blocked, and any transactions attempted during the suspension period will be returned or subject to delays.
Upbit has warned users against depositing SOLVE to avoid irreversible losses.
Upbit’s actions align with the country’s evolving regulatory landscape, particularly the Virtual Asset User Protection Act, which aims to ensure transparency and mitigate risks in the crypto space.
This new development comes as South Korea prepares to redraw the regulations for the crypto market.
For instance, a report on Jan 9 shows that South Korea’s Financial Services Commission (FSC) is exploring a gradual approach to allowing corporations to buy, sell, and hold cryptocurrencies like Bitcoin.
While no legal barriers currently prevent such actions, banks have been directed to reject corporate crypto account requests.
The FSC plans to work with the Virtual Asset Committee to establish listing and delisting standards for altcoins, introduce regulations for stablecoins, and improve self-regulation.
However, critics argue for more streamlined policies addressing unresolved issues like crypto taxation and approving Bitcoin spot ETFs.
The FSC has also acknowledged the need for enhanced investigative tools and forensic protocols to tackle unfair practices and monitor the market properly.
This is particularly important now as South Korea’s cryptocurrency investors recently surpassed 15 million in November 2024.
According to official data from the Bank of Korea, over 30% of South Korea’s population now uses cryptocurrency.
Total market valuation doubled from 58 trillion won in October 2024 to 102.6 trillion won in November, and average individual holdings rose from 3.87 million won to 6.58 million won.
The increased activity is also reflected in the soaring daily trading volume, which reached $10.2 billion in November, surpassing the combined activity of the KOSPI and KOSDAQ stock markets.
Deposits in crypto exchanges doubled to 8.8 trillion won during the same period.
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