11 cryptocurrency exchanges will close down in South Korea
The Financial Services Commission accuses them of conducting illegal activities
September 24 is the last date for exchanges to ger FSC approval
YEREVAN (CoinChapter.com) – The Financial Services Commission of South Korea, the country’s top financial regulator, plans to shut down eleven mid-sized local cryptocurrency exchanges. This is because it has allegedly caught them in conducting illegal activities.
The commission also plans to implement stricter regulations followed by exchanges hoping to operate in the country.
The 11 South Korean exchanges that have used fraudulent collective accounts will most likely close business. Local exchanges must finalize getting approval from the FSC by September 24 for business operation. https://t.co/kX3nJo8SBX
The 11 exchanges accused of fraud will probably shut down. The Financial Services Commission will stop the operations of these 11 exchanges and will bring their illegal activities to the knowledge of the police.
Although the names of the exchanges remain undisclosed, they will have a hard time getting approval to operate in the country, sources said. The crackdown by the commission seems to be serious. Through this, the commission also intends to send out a strong message.
The decision of the FSC comes as no surprise to the industry insiders.
Back in April, Eun Sung-soo, the South Financial Services Commission of South Korea chairman, had warned about this day.
Sung-soo had said that about 200 crypto exchanges risked getting shut down before September. The warning was based on the new anti-money laundering laws (AML) that came into force in 2020. The AML covered cryptocurrencies as well.
The new laws mandate that all crypto exchanges implement all AML guidelines and work with local banks or risk closure. However, at the time of AML implementation, just 4 of the 200 exchanges worked with the local banks.
Other than Upbit, Bithumb, Coinone, and Korbit, all other exchanges had failed to ensure that they had registered their customers with real names and details.
Besides those that risked mandatory closure, many had announced plans to shut down.
As the news of the new implementations spread, some crypto exchanges decided to exit the country rather than try to adjust. Giants like Binance and OKEx were among the first to shut operations.
Allbit, the decentralized exchange launched in 2018, followed suit.
The Ozys platform made a dramatic exit by announcing that doing business in South Korea had become impossible.
Darlbit also shut its doors in July after warning customers a month prior that it was stopping deposit and withdrawal services.
CPDAX was next in line to announce that it would cease operations.
“It is not a temporary but a permanent measure to close business. Those who possess cryptocurrencies in the account must withdraw them before 3:00 p.m. on August 31”
Whether they like it or not, cryptocurrency exchanges must adapt to the new directives or wind up operations. To be allowed to operate, they must obtain Information Security Management System (ISMS). ISMS contains a set of procedures that assist in managing customers’ information without the risk of compromising their information.
Those exchanges that fail to get approval from the Financial Services Commission will shut shop by the 24th of September. Despite pleas, the FSC is unlikely to offer any further extensions on the deadline.
However, these regulatory restrictions do not apply to local cryptocurrency exchanges alone. All foreign cryptocurrency exchanges must register with the Korea Financial Intelligence Unit (KFIU) by September 24.
Failing to do so will result in them closing down. Additionally, they may face criminal charges.
Yerevan-based Editor and writer focusing on topics about cryptocurrencies, NFTs, politics, and international relations. Having completed his Bachelor's and Master's degrees from Delhi's Jawaharlal Nehru University, he urrently works as a reporter at CoinChapter.
European Central Bank board member believes Bitcoin creator Satoshi Nakamoto did not understand money, warns of dangers from cryptocurrencies
Our Partners
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.