Financial authorities prepare a system to prevent "commercial beams"

Financial authorities have begun preparing a system to prevent the so-called "commercial scheme" in which prices soar immediately after the listing of virtual assets (coins).

The virtual asset industry explained on the 29th that the financial authorities are seeking to introduce a "commercial breaker" that restricts transactions of the stock for a certain period of time when the price of the stock skyrockets after the coin is listed.

The plan is to introduce a "cool-down" system that suspends speculative demand by temporarily suspending transactions of coins whose prices have soared. It does not target the entire market like the "side car" or "circuit breaker" of the stock market. A plan is being considered to target only certain coins with sudden fluctuations in market prices.

In addition, if the price gap with other exchanges exceeds a certain level due to soaring prices only on certain exchanges, it is also considered to limit transactions on exchanges where soaring prices have occurred.

It is expected that large coins such as Bitcoin and Ethereum will be excluded from the target as it restricts transactions on coins that are likely to manipulate the market price.

An official from the Financial Services Commission explained, "We are considering measures such as restricting transactions on specific stocks to protect investors."

Domestic coin market, coin prices show rapid volatility

After Coupang's listing on March 11 last year, the opening price was 65,000 times the listing price. After the market price soared, attention turned to the Movement Coin, which was listed on Coinone on December 17 last year.

The Movement Coin surged 46,000 times from being listed at 215 won to 998,500 won in three minutes. After that, it fell back to 10,000 won in five minutes and fell to 800 won two hours later. At that time, the transaction price of the overseas exchange was around $0.45 (KRW 600).

"Sang Gi-sim" occurs so frequently that it is considered a rite of passage in the domestic coin market. The coin industry points to a lack of distribution immediately after listing and expectations for new coins.

It is also explained that the domestic market's overflowing liquidity and the lack of initial volume of the listing are being used by market participants to manipulate the market price, leading to an extreme rise in the coin price.

Some in the industry are also concerned. It is pointed out that if only a specific exchange stops trading, only customers using that exchange can suffer damage. It is also pointed out that the application target and invocation criteria should be set as elaborately as possible to minimize damage to ordinary investors.