| Promotional image of Paycoin / A screenshot from Paycoin's official website |
By Lee Yeon-woo
Local cryptocurrency Paycoin has been delisted from Korea's top five cryptocurrency exchanges, meaning that around three million Paycoin users will no longer be able to make transactions on these exchanges starting from April 14.
According to market sources, Sunday, the Digital Asset Exchange Association (DAXA) decided to stop supporting Paycoin transactions on Friday. DAXA is the joint consultative body of five cryptocurrency exchanges, including Bithumb, Coinone, Gopax, Korbit and Upbit.
“Paycoin has not successfully addressed the concerns that led to its classification as a 'virtual asset of concern,'” the DAXA explained.
“After careful examination, we have concluded that there is a risk of further harm to investors at this time, given the rapid changes in the business and the past and future performance and direction of the overseas payment business,” it added.
Launched in 2019 by Pay Protocol, a subsidiary of the payment service company Danal, Paycoin was designed to be used as a form of cash in daily life. At its peak, its market cap topped 12 trillion won ($ 9.16 billion), which was even larger than the market cap of its parent company Danal.
In January Paycoin was designated as a “virtual asset of concern” by DAXA after regulatory authorities had rejected Paycoin's registration as a virtual asset service provider at the end of 2022. At the time, the authorities had turned down the company due to its failure to obtain real-name accounts from commercial banks.
Since an amendment aimed at preventing money laundering took effect in 2018, cryptocurrency companies are required to conduct transactions using bank accounts in the names of actual traders.
Due to Paycoin's failure to obtain real-name accounts as promised by the first quarter of this year, DAXA eventually decided to terminate transactions of the cryptocurrency in its exchanges. Although Paycoin had recently announced plans to pivot its business towards foreign transactions, it was unable to avoid collapsing.
Pay Protocol expressed its regret over the DAXA's decision, stating it has provided a detailed explanation of its roadmap for overseas payment business and the transformation of its domestic payment business model.
“The decision is unfair since many other projects fail to operate according to their white papers,” it added. The company has also hinted at the possibility of relisting in the future, as it plans to launch its foreign transaction business as scheduled and keeps making efforts to resume domestic transactions within this year.
In the meantime, the price of Paycoin has halved since the announcement of DAXA. According to data from the crypto market tracker, CoinMarketCap, Paycoin is trading at around $ 0.1172 as of 1 p.m. Sunday, down 58 percent since last Friday.