South Korea’s Bithumb exchange has been officially registered under the Financial Intelligence Unit (FIU). This makes all four major exchanges of the country licensed to operate virtual assets including cash-to-crypto services.
- The FIU announced on Nov. 19 it has registered Bithumb as an official virtual asset business. The country’s other three major exchanges — Upbit, Coinone and Korbit — had already been accepted under the FIU, while a decision on Bithumb’s business report had been postponed, some 75 days after the report was submitted. Some media reports attributed that to the ongoing trial of Bithumb’s major shareholder Lee Jung-hoon, after he was indicted with fraud charges.
- Bithumb’s CEO, Heo Back-young, released a public statement today thanking users and promising to “do best to focus on introducing cryptocurrencies based on a strict listing process” and that the exchange will “put investor protection as a top priority.”
- On March 25, the Financial Services Commission (FSC) set two major requirements for virtual asset businesses to meet. Exchanges first had to receive an Information Security Management System (ISMS) certification, which proves their capabilities in protecting users’ personal information. Another was getting a partnership deal with a local bank in South Korea to provide crypto exchange users with withdrawal and deposit bank accounts under their real names. This was to lower the risk of crimes such as money laundering, embezzlement or price manipulation.
- The crypto regulations left only 28 exchanges operating out of an original number of 63. Out of the 28, only the four major exchanges have fulfilled both requirements and subsequently became the only ones allowed to deal cash-to-crypto services. The other 24 have managed to acquire the ISMS certification but not the bank contract, and were limited to operate as token-to-token exchanges.
- On the same day as Bithumb, the FIU accepted business reports from Flybit and GDAC — two of the smaller exchanges in South Korea. However, as they have not secured a bank partnership, they cannot service cash-to-crypto.