Despite a looming compliance deadline, currently there are no crypto exchanges in South Korea that meet the new government reporting requirements to continue operating, according to financial authorities.
Fast facts
- The Financial Services Commission (FSC) revealed through a press release that none of the domestic cryptocurrency trading platforms have successfully complying with the nation’s new crypto exchange regulations. The FSC specifically pointed out that the industry-wide level of business disclosure and security in asset management is insufficient. The act, implemented in March, grants exchanges to meet the government requirements until Sep. 24. Exchanges that fail to comply face the risk of being closed down.
- Industry experts say the exchanges are not getting enough time to prepare. At an online forum yesterday, Kim Hyoung-joong, head of Korea University’s Cryptocurrency Research Center, reasoned that a clear standard has been absent for exchanges in acquiring real-name bank accounts, which is one of the requirements. Kim and other industry members at the forum called on the FSC to extend the deadline.
- Lawmakers Jo Myung-hee and Yoon Chang-hyun from the People Power Party have also proposed bills to allow Korean crypto exchanges more time to prepare for the government requirements.
- The crypto exchange regulations are triggering an exodus among foreign exchanges that once served South Korean investors. Japan’s Bitfront recently announced that it would suspend its services for Korean investors, including Korean language support and payment services using Korean credit cards. This follows the FSC’s announcement that the same level of strict regulations will apply to foreign exchanges operating in Korea, which prompted Binance to drop its Korean services earlier this month. FTX Trading has also deleted Korean language support from its list of language settings on its website.