Dozens of crypto exchanges in South Korea could suspend trading this week
To continue operating in the country, crypto exchanges must secure approval and be registered with the Financial Intelligence Unit (FIU), which operates under the Financial Services Commission (FSC).
Mon, 20 Sep 2021, 09:22 am UTC
Dozens of crypto exchanges in South Korea could partially or fully suspend trading activities on their platforms this week. More than half of the country’s crypto trading platforms have met the preliminary requirements to keep their business operations as new regulation comes into effect by Friday, September 24.
To remain operating in the country, crypto exchanges must secure approval and be registered with the Financial Intelligence Unit (FIU), which operates under the Financial Services Commission (FSC). The deadline for registration is on Friday, September 24, which means that those who have not yet registered must shut down their businesses, according to Reuters.
As of Monday last week, only 28 out of 63 exchanges operating in the country received certification from the Korea Internet and Security Agency (KISA), the first step in obtaining registration for their business operations, according to Fortune. According to the Financial Services Commission, the remaining 35 exchanges are not likely to comply in time for the fast-approaching deadline.
Exchanges are also required to enter into a partnership with a domestic commercial bank to allow them to open real-name accounts for their clients. This means that those that have registered but have not established partnerships with local banks will be prohibited from trading in Korean won.
Unfortunately, only the country’s Big 4 – Bithumb, Coinone, Korbit, and Upbit – have secured partnerships with banks. Most banks are reluctant to partner with exchanges due to fears of being held accountable for crypto-related crimes such as money laundering.
Crypto exchanges need to notify their customers should they temporarily close for failure to secure the necessary requirements to continue their operations. “Should some or all services need to be closed, (exchanges) should notify customers of the expected closing date and procedures to withdraw money by at least seven days before the closure,” the Financial Services Commission said.
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