South Korean Crypto Exchanges Could Suspend Services Next Week : Report
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FSC to Shut Down Many of South Korean Crypto Exchanges
South Korea’s leading financial regulator, the Financial Services Commission (FSC) is set to shut down local cryptocurrency exchanges amid 35 out of 63 have not met the requirements to register with the Financial Intelligence Unit.
Reportedly, the local crypto exchanges were required to get ISMS certification and secure real-name bank accounts for clients. With the certification processes requiring around three to six months, the deadline to register is only eight days away. The regulator had already warned unregistered exchanges of potential closure by September 17:
"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."
Four of the largest crypto exchanges in South Korea have already registered as legal trading platforms which include Upbit, Coinone, Bithumb, and Korbit, and will be allowed to make won settlements. Together, these exchanges handle more than 97% of the country’s crypto trading volume.
While smaller exchanges crypto exchanges such as ProBit, Cashierest, and Flybit have already said they will end won trading, and that they will continue operations involving only digital coin trading until securing partnerships with banks.
Investors Could End Up Empty-Handed
Of all exchanges, nearly 40 are set to suspend all services while a further 28 will have security certificates but have not secured bank partnerships.
The Korean won is the sixth-most-used fiat currency in the world to trade major cryptocurrencies as of Wednesday, according to data from CoinMarketCap.
Over the years a Kimchi premium has often existed where Bitcoin costs more than elsewhere in the world due to high demand. The shutdowns could cause 3 trillion won or $2.6 billion of damage to investors in Kimchi coins, according to an estimate by the chairman of the Korea Society of Fintech Blockchain last week.