Korea Exchange to Scrutinize Crypto-related Stocks, Foul Play Suspected

Source: Adobe / Golubovy

South Korea’s stock exchange operator Korea Exchange (KRX) will step up monitoring of crypto-related stocks after a few volatile weeks for public companies with ties to the crypto industry.

Although no South Korean crypto exchange has gone public yet, a number of firms with crypto companies in their portfolios are listed on the KRX. In the last few weeks the prices have increased alongside the rapid crypto prices.

Per Yonhap news agency, the KRX’s Market Oversights Committee, will now begin “reviewing” both crypto-related stocks and bio-related companies (healthcare, vaccines and non-contact medicine) after issuing a total of 56 warnings to listed companies in two sectors in the period from November 30th to December 4th.

The KRX, which trades over 2,500 shares and has a market capitalization of over $ 1.4 billion, is headquartered in Busan, though all market oversight operations are based in the capital, Seoul.

And the market regulator seems to believe that unscrupulous traders and company executives have been trying to make quick money in the market, as stock prices of both sectors have risen lately – with COVID-19 vaccine breakthroughs and soaring Bitcoin (BTC) prices the market.

The regulator gave an example of some of their unfair trade flags, including a case of a group of executives from an unnamed public company. It is believed that executives converted and sold convertible bonds immediately after (allegedly inaccurate) information related to the launch of the online cryptoasset business.

At least six companies affiliated with crypto companies have been audited by the regulator, which has the power to sanction, punish and even delist offenders.
Learn more: Crypto regulation in 2021: the piecemeal approach and new winds