Decrypt’s Art, Fashion, and Entertainment Hub.
Bithumb, one of the largest crypto exchanges in South Korea, delisted two cryptocurrencies last week. It follows the firm’s decision to remove three assets from its platform in November.
In August, Bithumb formally stated that it will evaluate all cryptocurrencies listed on the exchange every month through an internal committee. If an asset does not meet the standards of the exchange, it will be delisted. Since November, Bithumb has delisted five crypto assets in total and they are: SALT, AUTO, DACC, ROM, and PST.
The exchange has not specifically revealed reasons behind the delisting of the five assets. In a general statement, it said, “Bithumb has been designated and announced AUTO, SALT (on November 14th) as Investment Alert Cryptocurrency in accordance with the [Bithumb Investment Alert Cryptocurrency Designation Policy]. Bithumb continued to monitor the eligibility for listing, but the reason for designating the investment alert has not been resolved.”
On the same day, Bithumb also placed another crypto asset called OCN on the Investment Alert Cryptocurrency list, moving forward with its plans to clean up the platform for its users.
In traditional finance, exchanges establish a category of stocks or assets that perform poorly in terms of volatility, trading activity, turnover and rotation rate. To maintain a better environment for investors, exchanges delist such assets regularly.
This system is not often utilized by cryptocurrency exchanges since during bear markets or times of low volume, many crypto assets would be at risk of becoming delisted.
According to Bithumb, if cryptocurrencies are placed under the Investment Alert Cryptocurrency list, they are given two months to demonstrate significant improvements in the areas they struggle in. If the exchange does not see sufficient changes, the assets are delisted.
In the upcoming months, as Bithumb alone is projected to delist more than dozen cryptocurrencies, it may set a precedent for the rest of the industry to adopt higher standards for listing.