With only a few days left until Korea’s regulatory deadline for virtual asset exchanges, all have accepted the government mandate in service suspension except for one exchange, Gopax.
Fast facts
- Twenty-four virtual asset exchanges in South Korea are in limbo — they have only met one of two new requirements, and were subsequently asked by the financial authorities to clear out all cash-to-crypto functions until completing the requirements. While most have announced a cash service suspension last week, only one exchange, Gopax, says it will push through with its normal operational services until the day of the deadline.
- With a goal of promoting better investor protection and transparency in crypto transactions, Korea’s latest crypto regulations gave virtual asset businesses until Sept. 24 to comply with two major requirements. The Information Security Management System certification is the first condition, intended as a way for crypto businesses to prove they have sufficient safeguards for protecting user information. The new regulation also requires crypto exchanges to acquire bank contracts so that customers could have withdrawal and deposit accounts in their real names, to lower the risk of crimes such as money laundering or price manipulation. Exchanges that have not acquired the bank contract were obligated to announce their closure of cash-to-crypto services by Sept. 17.
- However, Gopax says a partnership for the real-name bank account is imminent, thus there is no need to eliminate its cash-to-crypto services. Gopax has assured its users that it is able to obtain the bank contract before the deadline. Gopax is also holding a special “real-name account” event for which it will randomly give out Bitcoin for users who pre-register for the real-name withdrawal and deposit accounts at Gopax.
- Other exchanges including Flybit, Bitcmon and Coredax that have closed down their cash-to-crypto functions notified users that they will resume the cash services as soon as they secure a contract with local banks. An official from Coredax told Forkast.News that it is also in talks with several banks in hopes of restoring its cash-to-crypto services. Meanwhile, Huobi Korea says it will announce the result of its acquisition of the real-name bank account contract by Sept. 24.
- Korean exchanges have been struggling to find bank partnerships as banks are reluctant to sign contracts out of fear of involvement or liability in case there are crypto-related crimes. Several major banks — including KB Kookmin, Hana and Woori Bank — have declared they would not be affiliated with crypto exchanges. However, regional banks such as Busan Bank, Jeonbuk Bank and Jeju Bank are reported to be in talks with crypto exchanges.