A looming deadline for crypto exchanges in South Korea to either meet new compliance requirements or face closure will not be extended, the country’s newly nominated chief financial regulator says. The rules are designed to improve investor protection and transparency in crypto transactions, but many exchanges have been calling for a longer grace period.
Fast facts
- At his confirmation hearing on Friday, Koh Seung-beom insisted on maintaining the Sept. 24 deadline to prevent potential damages to crypto investors. In March this year, the Financial Services Commission’s (FSC) enforced a new law that mandates crypto exchanges comply with its requirements and submit a business registration report to the Financial Intelligence Unit (FIU) by Sept. 24. So far, only one exchange out of 63 has successfully submitted the report to the FIU.
- One condition demands exchanges obtain a bank contract to provide real-name bank accounts to the users for better transparency. Most exchanges are still having trouble obtaining a bank contract, as banks expressed fear of being held responsible for possible financial crimes from exchanges. Democratic Party Lawmaker Kim Byung-wook had suggested to Koh in the hearing that the FSC should rather hold exchanges more responsible for their financial crimes.
- Meanwhile, the FSC announced through a press release that it will establish a “virtual asset inspection department” under the Financial Intelligence Unit (FIU). Its focus will be on supervising cryptocurrency exchanges and handling relevant legal affairs.