Author: Chloe, ChainCatcher
The KOSPI index has surged approximately 95% year-to-date, nearly doubling. Even as South Korean stocks are riding a strong upward momentum, another group of South Korean listed companies is gradually being squeezed out of the market.
According to the Chosun Ilbo, revised listing regulations raising the threshold for stock retention in South Korea took effect on July 1, putting some KOSDAQ-listed companies that profited from cryptocurrency investments at risk of delisting. Facing plummeting crypto prices and capital outflows from the KOSDAQ market, their market values have repeatedly fallen below the new threshold, putting them at imminent risk of being removed from the exchange.
The South Korean government is tightening regulations, making it difficult to maintain listing status.
DAT was pioneered by Strategy, followed in the capital markets by Japan’s Metaplanet, and South Korea’s DAT companies have replicated the same playbook. Take BitPlanet as an example: the company was formed in July 2025 when a consortium led by Asia Strategy and Sora Ventures acquired the KOSDAQ-listed company SGA. It currently holds 300 bitcoins, with a long-term goal of accumulating 10,000; its CEO, Lee Seong-hoon, has publicly stated that the company’s model was inspired by Strategy and Metaplanet.
The problem is that this "issuing shares to raise funds, buying crypto, and seeing stock prices rise" flywheel heavily relies on rising crypto prices; once crypto prices reverse, these Korean DAT companies—mostly small and medium-sized—won't first face a funding challenge, but rather the question of whether they can even maintain their listing status.
According to The Herald Business, this reform strictly tightens four delisting criteria, with the market capitalization threshold posing the greatest threat to DAT companies. The KOSDAQ listing market capitalization requirement will rise from the current 15 billion KRW to 20 billion KRW (over $130 million), and will jump again to 30 billion KRW in January next year.
The new delisting criteria are strict: a stock will be designated as a “Caution” stock if its price falls below KRW 1,000 for 30 consecutive trading days, or if its market capitalization drops below KRW 20 billion for 30 consecutive trading days. Once designated, the company has a 90-trading-day grace period to recover; if it fails to regain compliance for 45 consecutive trading days during this period, it will be formally initiated into delisting proceedings. Crucially, both the price and market capitalization criteria must be met “simultaneously”—failure to meet either one alone is sufficient to trigger delisting.
At the same time, the traditional corporate tactic of “artificially inflating stock prices” has been shut down. In the past, when a stock price fell too low and neared the delisting threshold, companies could consolidate multiple shares into one, causing the per-share price to immediately rise—though the company’s overall value remained unchanged. The Korea Herald explains that the new regulation aims to close this loophole: for example, a company with a stock price of 300 won that boosts its price to 1,200 won through a share consolidation will still be subject to delisting if the adjusted per-share value remains too low. In addition, companies that have already performed a share consolidation or capital reduction within the past year are prohibited from using the same tactic once placed on the watch list; even if permitted, the consolidation ratio must not exceed 10-to-1.
Other requirements have also been tightened: the point at which a company is deemed to be fully capital-eroded has been expanded from year-end financial statements alone to include semi-annual reports; the threshold for accumulated delisting penalty points due to false financial statements or improper disclosures has been lowered from 15 points to 10 points, and a single major or intentional violation is now sufficient to trigger a review; after being placed under delisting review, the maximum period a company has to improve has been reduced from 18 months to one year.
KOSDAQ itself is weak, coupled with a weakening crypto market
According to the Chosun Ilbo, the risk of delisting is no longer hypothetical. Many companies are currently in a temporary state of “meeting but not safely exceeding” requirements: Parataxis Ethereum has a market cap of approximately KRW 26.8 billion, and BitPlanet has approximately KRW 33.1 billion—both above the KRW 20 billion threshold for the second half of the year. However, Parataxis Ethereum faces potential risk if compared to the increased KRW 30 billion standard effective in January next year. The most severe case is Parataxis Korea, which was placed under substantive review for listing eligibility as early as April due to capital impairment, and its stock has already been suspended. The Chosun Ilbo noted that if the downward trend in market capitalization continues, these DAT companies may begin facing delisting procedures from BitMax onward in early next year.
Looking back, the direct trigger for this crisis was the weakening crypto prices. According to Bloomingbit, Bitcoin surged to over $120,000 in July last year amid the inauguration of Trump’s second administration and pro-crypto policies; however, following the turning point of U.S.-China trade tensions in October, prices declined, and this month have fallen to the lower end of $50,000. With crypto prices dropping in both the first and second quarters of this year, DAT Corporation must record significant impairment losses on its books, potentially leading to an even greater stock price impact during the earnings season.
Compounding the issue is the inherent weakness of KOSDAQ itself. While the KOSPI has nearly doubled this year (rising approximately 95%), KOSDAQ has declined by about 10%, as capital has flowed heavily toward KOSPI blue-chips like Samsung Electronics and SK Hynix, marginalizing KOSDAQ and its constituent DAT companies. These companies attempted to bridge their funding gaps through convertible bonds (CBs) and preferred shares, but were unable to counter the broader downward trend in crypto asset prices.
The overall weakness of KOSDAQ is evident in the numbers. According to The Korea Herald, the KOSDAQ index fell from 945.57 at the beginning of January to 851.37 last Friday, a decline of nearly 10%, dragging down the market capitalization of its constituent stocks. As of last week, excluding SPACs and special shares, 178 KOSDAQ-listed companies had a market cap below 20 billion KRW, accounting for about 10% of the total 1,748 companies—nearly triple the 66 such companies at the start of the year. Additionally, there are 180 “penny stocks” trading below 1,000 KRW, with a combined market cap of 6.14 trillion KRW.
The Korea Herald, citing data from Korean exchanges, noted that all 39 industries on KOSDAQ ended in negative territory in June (June 1–26), with the KOSDAQ150 Industrial Materials sector leading the decline at -35.47%, followed by Financials (-32.63%), Technology Listed Companies (-32.19%), and Transportation Equipment and Parts (-31.11%), all of which fell more than 30%.
Conclusion
For these micro-cap companies, the room to自救 through financial engineering is shrinking. The Korea Herald, citing industry views, notes that the new rules’ “market capitalization requirement” will be harder to meet than the “share price requirement.” A representative from a KOSDAQ-listed company admitted that while penny stocks can still boost their share prices through free capital reductions or stock consolidations, it’s much harder to meet the market cap threshold without actual price appreciation. It’s also difficult to escape the situation through mergers and acquisitions in the short term; as long as KOSDAQ remains depressed, more and more companies will fail to meet the market cap threshold.
A representative example is Hyungji I&C, which conducted a 10-for-1 free share consolidation in March, pushing its stock price close to 4,000 KRW while keeping its market capitalization around 10.6 billion KRW—far below the new threshold—demonstrating that even if the stock price temporarily meets the requirement, the market cap hurdle remains unmet. The Chosun Ilbo also emphasized that the revised listing rules include provisions restricting share consolidation and capital reduction after management stock designation, making it harder for companies without genuine price recovery to remain listed.
South Korean exchange officials downplayed the impact, noting that a wave of delistings will not immediately occur in July, as companies listed under management oversight still have a grace period to improve before proceeding to the next step. However, brokerage researchers hold a more pessimistic view. Lee Jae-won, a researcher at Daewoo Securities (South Korea’s Yuanta Securities), stated that, based on fund supply and demand, profitability, and interest rates, the current environment is favorable for the KOSPI; until confirmed signs of retail capital returning and improved profit forecasts emerge, KOSDAQ’s relative weakness is likely to persist.
In other words, while the overall Korean stock market is booming, these cryptocurrency-related stocks branded as the “Korean version of Strategy” are at a crossroads, facing pressure from falling token prices, shifting market capital flows, and new regulatory guidelines.