South Korea is experiencing an unusual rise in prices and trading volumes of low-cap altcoins, referred to as 'Kimchi Coins', linked to interest in a government-backed stablecoin.
Volume Explosion in Low-Cap Altcoins
Recently, South Korea has witnessed a remarkable surge in prices of low-market-cap altcoins, popularly known as Kimchi Coins. This phenomenon is attributed to the buzz around a stablecoin project connected to the South Korean won. Altcoins such as MEVerse (MEV), fanC (FANC), BORA, and STMX are showing significant price movements, especially on local exchanges like Bithumb. Research indicates that MEV has surpassed major altcoins like Ethereum and Solana in trading volume.
Experts Warn of a Possible Bubble
Market experts caution that the rise in Kimchi Coins might not be sustainable. Rating agency Apywa has assigned low scores to these coins, with no verified connection to the government's stablecoin plans. An official from an investment firm noted, 'With the government's initiative to issue a stablecoin denominated in the Korean won, fintech and blockchain companies are declaring their involvement one after another, boosting their stock prices.' However, there are concerns that this price growth could lead to a sharp decline.
South Korean Court Upholds Sentences for Law Violations
In a related development, the South Korean appeals court upheld prison sentences for investors who profited illegally from the 'kimchi premium'. A group accused of smuggling approximately $296 million worth of cryptocurrency from Japan to South Korea was charged with violating currency laws and using shell companies to conduct this scheme.
The rise of Kimchi Coins in South Korea raises many questions regarding the stability and authenticity of these investments. Expert assessments and legal actions highlight the necessity for thorough analysis prior to investing in these altcoins.
