Author: Chloe, ChainCatcher
The KOSPI index has surged approximately 95% year-to-date, nearly doubling. Just as the Korean stock market is soaring, another group of Korean listed companies is gradually being squeezed out of the market.
According to Chosun Ilbo, revised listing regulations raising the threshold for maintaining stock market listing status were implemented in South Korea on July 1st. Some KOSDAQ DAT (Digital Asset Treasury) listed companies that profited from crypto investments now face delisting risks. They are caught between plummeting cryptocurrency prices and capital outflow from the KOSDAQ market, with their market capitalization continuously falling below new thresholds, putting them at risk of being delisted at any time.
Korean Government Tightens Policies, Listing Status Becoming Difficult to Maintain
The DAT trend was pioneered by Strategy, with Japan's Metaplanet following suit in the capital markets. Korean DAT companies have replicated the same playbook. Taking BitPlanet as an example, this company was formed in July 2025 when KOSDAQ-listed company SGA was acquired by a consortium led by Asia Strategy and Sora Ventures. It currently holds 300 Bitcoins, with a long-term goal of accumulating 10,000; its CEO Lee Seong-hoon publicly stated that the company's model was inspired by Strategy and Metaplanet.
The problem is that this "raise capital via stock issuance, buy crypto, stock price rises" flywheel is highly dependent on rising cryptocurrency prices. Once prices reverse, these Korean DAT companies, mostly small and medium-sized, face not a financing hurdle, but the challenge of "whether they can maintain their listing status."
According to The Herald Business, this reform comprehensively tightens four major delisting criteria, with the market capitalization threshold posing the greatest threat to DAT companies. The market capitalization standard for maintaining a KOSDAQ listing has been raised from the current 15 billion KRW to 20 billion KRW (over $13 million USD), with a further jump to 30 billion KRW scheduled for January next year.
The new system's assessment mechanism is quite stringent: a stock will be designated as a "Caution Stock" if its price remains below 1,000 KRW for 30 consecutive trading days, or its market capitalization stays below 20 billion KRW for 30 consecutive trading days. After designation, there is a 90-trading-day recovery period. If it cannot meet the standard again for 45 consecutive trading days within this period, it formally enters the delisting process. Crucially, the stock price and market capitalization criteria must be met "simultaneously"; failure on just one is sufficient grounds for delisting.
At the same time, past tricks used by companies to artificially boost stock prices have been blocked. Previously, when stock prices were too low and nearing the delisting line, companies could consolidate several shares into one, immediately increasing the per-share price, even though the company's overall value remained unchanged. The Herald Business explains that the new rules aim to close this loophole: for example, even if a company with a 300 KRW stock price uses a reverse split to raise it to 1,200 KRW, it will still be subject to delisting if the implied per-share value remains low. Furthermore, companies that have already conducted a reverse split or capital reduction within the past year are prohibited from using the same trick again once placed on the watchlist; even if allowed, the consolidation ratio cannot exceed 10-to-1.
Other criteria have also been tightened: the timing for assessing whether a company's capital is completely eroded has been expanded from only checking year-end financial reports to also checking semi-annual reports; the penalty point threshold for delisting due to false or irregular financial disclosures has been lowered from 15 points to 10 points, and a single major or intentional violation is enough to trigger review; the maximum improvement period allowed for companies under delisting review has been shortened from 18 months to 1 year.
KOSDAQ Weakness Combined with Crypto Market Downturn
According to Chosun Ilbo, the delisting risk is no longer hypothetical. Many companies are currently in a temporary state of "meeting the standard but not safe": Parataxis Ethereum's market cap is around 26.8 billion KRW, BitPlanet's is around 33.1 billion KRW. Both are above the 20 billion KRW threshold for the second half of the year, but Parataxis Ethereum is at potential risk when measured against the 30 billion KRW standard taking effect next January. The worst situation is Parataxis Korea, which was placed under substantive listing eligibility review for capital erosion back in April, and its shares have already been suspended. Chosun Ilbo notes that if the market capitalization decline trend continues, these DAT companies may face delisting procedures starting with BitMax early next year.
Looking back, the direct trigger for this crisis is the weakening cryptocurrency prices. According to Bloomingbit, Bitcoin, driven by the start of Trump's second term in the US and pro-crypto policies, once surpassed $120,000 in July last year; but it has since retreated since the US-China trade friction turning point last October, falling to the mid-$50,000 range this month. As prices fell in both Q1 and Q2 this year, DAT companies had to recognize large-scale valuation losses on their books, with potentially greater stock price impacts during earnings season.
Compounding the problem is KOSDAQ's own weakness. While KOSPI has nearly doubled this year (up about 95%), KOSDAQ has instead retreated about 10%. Capital has concentrated in KOSPI heavyweights like Samsung Electronics and SK Hynix, marginalizing KOSDAQ and the DAT companies within it. These companies attempted to fill funding gaps by issuing convertible bonds (CB) and preferred shares, but they couldn't withstand the overall downtrend in crypto asset prices.
KOSDAQ's overall weakness is evident in the numbers. The Herald Business statistics show the KOSDAQ index fell from 945.57 in early January to 851.37 last Friday, a decline of nearly 10%, dragging down component companies' market caps. As of last week, excluding SPACs and preferred shares, 178 KOSDAQ companies had market capitalizations below 20 billion KRW, accounting for about 10% of the total 1,748 companies, a nearly threefold increase from 66 companies at the beginning of the year. There were also 180 "penny stocks" with prices below 1,000 KRW, with a combined market capitalization of 6.14 trillion KRW.
The Herald Business also cites Korea Exchange data indicating that in June (1st to 26th), all 39 KOSDAQ industry sectors closed in the red, with KOSDAQ150 materials leading the decline at -35.47%, followed by finance (-32.63%), technology listed companies (-32.19%), transportation equipment and parts (-31.11%), all falling over 30%.
Conclusion
For these ultra-small companies, the room for self-rescue through financial engineering is being squeezed. The Herald Business cites industry views suggesting the "market capitalization criterion" in the new system will be harder to meet than the "stock price criterion." A person from a KOSDAQ-listed company admitted that while penny stocks could at least temporarily boost prices through free capital reductions and reverse stock splits, market capitalization is difficult to meet without genuine stock price increases. Finding a way out through M&A in the short term is also not easy. As long as KOSDAQ weakness persists, more companies will fail to meet the market capitalization threshold.
A representative example is Hyungji I&C. In March, it conducted a 10-to-1 free reverse split capital reduction, raising its stock price to near 4,000 KRW, but its market cap remained at about 10.6 billion KRW, far below the new threshold. This illustrates that even if the stock price meets the standard temporarily, the market capitalization hurdle remains insurmountable. Chosun Ilbo also emphasizes that the revised listing rules include provisions "restricting capital reductions and reverse splits after designation as a Caution Stock," making it more difficult for companies without genuine stock price recovery to continue staying listed.
Korea Exchange officials downplayed the immediate impact, stating a delisting wave would not occur immediately in July, as companies placed on the cautionary list still have an improvement period before the next step. However, securities analysts' judgments are more pessimistic. Lee Jaewon, a researcher at Yuanta Securities Korea, stated that in terms of fund supply and demand, earnings, and interest rates, the current environment is favorable for KOSPI; until individual fund flows return and earnings forecast rebounds are confirmed, KOSDAQ's relative weakness is likely to continue.
In other words, while the Korean stock market as a whole is surging, these crypto-concept stocks flying the flag of "Korean-style Strategy" stand at a crossroads of survival, caught in a three-way squeeze from cryptocurrency prices, market capital flows, and new regulatory rules.
