The changes applied to the cryptocurrency regulations in South Korea have forced almost two-thirds of the country’s crypto exchanges to be scheduled for shut down soon, leaving investors with huge losses.
In regards to the announcement made by South Korea’s Financial Commission, all local and international cryptocurrency exchanges have been advised to register themselves as legal platforms, and the deadline for the registration is 24th September. The stated conditions and requirements for registration are quite difficult for many localized exchanges, so many shutdowns are imminent. According to sources, because of the challenging requirements, around forty out of the sixty crypto exchanges are looking to shut down operations in South Korea soon.
The president of Korean Finance Consumer Federation, Cho Yeon-Haeng, gave his remarks about the situation, saying that, as crypto trading operations will continue to seize and assets will be frozen around the country, inventors will be experiencing huge losses because the crypto exchanges will not be able to handle customer protection services, because of the closure.
Requirements of the Registration
For any crypto exchange to register itself as a legal platform, a set of requirements have been issued. One of the requirements states that the exchange must shake hands with a local bank so that bank accounts with real names are issued. Many of the local lenders are not in favor of this because they are scared that money laundering will be exposed.
Working with banks is something that cryptocurrency exchanges have not been so comfortable with. For Example, in Australia, there are many crypto exchanges that have been kicked by banks and are now facing difficulty in searching for new lenders. The same happened in India, where banks were ordered to remove their connections with crypto-based firms, which resulted in transaction process issues throughout the country.
Risky Registrations
As of now, around twenty crypto exchanges including, Upbit, Bithumb, and Korbit, have managed to agree to the conditions and requirements, by developing security solutions, in regards to personal information, but according to information provided by insiders, many of these exchanges will have a tough time, because of their size in the market. According to Kim Hyoung-Joong from the Crypto Research Department at Korea University, nearly 42 ‘Kimchi’ coins are also expected to be removed.
