When South Korea’s two largest exchanges move against the same token within hours, the first instinct is to read it as a coordinated delisting. The INIT case is more precise — and less dramatic. On October 26, Upbit and Bithumb each placed Initia’s INIT on a trading-caution list, but neither exchange removed the token from its books. The action is a statutory review freeze, not an exit.
The mechanism comes from Korea’s Virtual Asset User Protection Act, in force since July 2024. The law requires exchanges to run trading-support reviews and to flag an asset when a security incident involving the issuer’s wallet or distributed ledger has been confirmed and its cause left unresolved. Upbit’s notice, number 6708, cites sub-item (e) of Article 17, Item 1 of the enforcement decree, and sets the designation to run from 14:00 KST on October 26 through the fourth week of November — November 23 to 27 — after which the exchange will extend, lift, or end support. Bithumb issued a parallel notice under the same provision.
What the flag actually restricts is narrow. Trading in the existing pairs can continue. What stops is the token’s plumbing: fresh deposits are blocked, and holders cannot withdraw INIT from either venue until the review closes. Upbit said INIT deposits and withdrawals have been frozen since 00:57 KST on October 24, and that when services resume, withdrawals will return first so users can exit, with deposits reinstated only after further review. For anyone holding INIT on those two venues, the result is a frozen window of up to a month.
Two exchanges reaching the same conclusion hours apart can look coordinated, but the likelier explanation is procedural. Both venues apply the same statutory trigger, so their risk committees can arrive at the same designation independently. The framework traces back to the failures that prompted the law — the Terra collapse and the Haru Invest and Delio suspensions that followed — and a halted chain with an unresolved mint bug is exactly the case the rule was written to catch.
The backdrop is Initia’s Day-0 exploit. Initia said an attacker exploited a MoveVM bug on its Cosmos SDK chain to mint and bridge out roughly $2.7 million of AUSD, ETH, and USDC before the network was paused, and that the bug does not affect native INIT. Co-founder Ezaan Mangalji said a fix is expected to be audited within days. Whether the exchanges lift the flag turns on whether that fix ships, is audited, and is accepted before the late-November window closes.
The distinction worth keeping is that a caution designation is not a verdict. It is a review trigger that pauses asset movement while the security question stays open. The exploit froze the chain on October 23; the exchange designations now freeze INIT’s liquidity in Korea. Those are two separate chapters, and the review calendar — not the on-chain state — is what decides when Korean holders can move their coins again.
Source: BlockchainReporter.