An updated version of a South Korean crypto regulatory order could cause a multitude of crypto exchanges to close their services.
The new regulation requires proof of account registration with any domestic bank by September 2021. Crypto exchanges were initially granted a six month grace period before having to register with a bank. However, this new regulation will make it harder for exchanges to operate their businesses.
South Korean banks are not in a big hurry to do business with crypto exchanges. Therefore, very few will meet the new requirements set by the government.
Crypto exchanges in South Korea are uniting
Now, some crypto exchanges are reportedly organizing together. They plan to indict the South Korean government asserting neglected to their job of fair regulation. Essentially, domestic banks have been passed the responsibility by the South Korean government to be the arbiters of crypto regulation. According to an official from a local crypto exchange, banks are being very tough on exchanges. He said:
“These days, banks are refusing to initiate their cryptocurrency exchange verification processes without clear reasons and most exchanges are failing to get a chance to prove themselves. The Financial Services Commission needs to step in right away.”
Domestic banks are upset with new framework
Strangely enough though, South Korean banks are not satisfied with the rules of regulation either. They feel that they have too much power delegated to them to monitor money laundering. An article last month from the Koreatimes.co said:
“Banks will be required to ensure that their virtual currency exchange clients are classified as high-risk. This means they are subject to strengthened financial transaction monitoring and user ID verification. This is according to the Financial Services Commission (FSC).”
There are currently four exchanges in South Korea which are being investigated by banks for a possible admission to their services. These include Korbit, Bithumb, Upbit, and Coinone. According to a report earlier this month for the Korea time,
There are over sixty crypto exchanges in the South Korea. Therefore, many of these exchanges will fail to qualify for a partnership under the government’s new regulatory measures. However, it was reported that a number of these exchanges met jointly with the South Korean Financial Services Commission last month. They expressed their criticisms of the current regulatory structure for crypto in South Korea. Crypto exchanges in South Korea are going to have to fight back the South Korean government in order to continue their operations.
If you want to learn. more about South Korea cryptocurrency policies you might enjoy: South Korea teases flexible crypto tax laws.