This week is the deadline for cryptocurrency exchanges and wallet operators to comply with new regulatory requirements to remain open in South Korea. So far, only one crypto exchange has been licensed to continue operations. About 60 crypto exchanges are expected to close or services will be reduced.
Expected to close 60 crypto exchanges or reduce services
Under the “Reporting and Use of Specific Financial Transaction Information (Special Act) Act”, crypto exchanges must be an Information Security Management System (ISMS) যা certified and registered with the South Korean Financial Intelligence Unit (FIU) by September 24. . Crypto exchanges that fail to do so must close on that date.
According to local media, 34 exchanges have not received ISMS certification, so they are expected to close completely on September 24.
A total of 2 crypto exchanges have been ISMS-certified but only one unit of the Financial Services Commission (FSC), the country’s top financial regulator, has been successfully registered with the FIU.
The Financial Intelligence Unit held its first crypto business review meeting on Friday to review a report submitted by Dunamu Inc., the operator of the country’s largest crypto exchange upbeat. The review committee accepted the report, making Upbit the first licensed crypto exchange operator in the country.
FIU further revealed on Friday that, in addition to Upbit, four more crypto exchange operators have submitted a report: Bithumb, Corbit, Kainon and Korea Digital Exchange (Flybit). Also, a wallet operator, Korea Digital Assets (KODA), submitted a report.
The FSC says:
Considering that there is one week left until the 24th, virtual asset providers who have not yet submitted a report must submit a report immediately.
In addition, registered crypto exchanges wishing to trade in Korean One must partner with a bank to provide users with real-name verified accounts. So far, only the country’s largest exchanges – Upbit, Bithumb, Coenone and Corbit – have confirmed banking partnerships. Banks are reluctant to partner with small exchanges because of risks such as money laundering.
This means that 25 of the 29 ISMS-certified crypto exchanges will be crypto-exchanges if they successfully register with FIU. They must stop trading in Korean One by September 2 and must inform their clients in advance as required by financial regulators. Four companies – GoPax, Jadak, Hanbitco and Hubi Korea – said they were still working to secure banking partnerships within the deadline.
Currently, of the 63 crypto exchanges, only the top four exchanges will continue as normal. The rest will either shut down or reduce services.
What do you think about closing all these crypto exchanges under the new rules? Let us know in the comments section below.
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