South Korean crypto exchange, Gopax, backed by Digital Currency Group, faces the possibility of being closed before the country’s upcoming deadline for filing applications for its official platform operating license.
In order to obtain a license, all crypto exchanges must provide evidence that they operate with real name accounts with Korean banks. The problem is that for many of the country’s small and medium-sized exchanges, domestic banks have largely refused to participate in a risk assessment process and are confident enough to serve only four platforms: the country’s top exchanges: Upbit, Bithumb, Korbit, and Coinone. The deadline for all license applications is now just a week away, September 24th.
In a notice to users released on September 17, the Gopax team wrote that the exchange is “currently in negotiations with a financial institution to set up a deposit and withdrawal account to verify real name,” under the terms of the new administrative mechanism.
Through September 24, the exchange will continue to operate Korean won cryptocurrency trading services as usual, but if the negotiations don’t resolve the issue, Gopax has warned that it will provide users with a later notice of the end of support for Won, A – and will inform you of withdrawal transactions. The platform has stopped providing services to non-Korean users who are banned from using the country’s exchanges under the new regulations.
Gopax is operated by a company called Streami, which has received funding from Shinhan, one of the largest commercial banks in Korea. The exchange operator has proactively tried to establish the platform’s compliant access data and worked towards ISO / IEC 27001 certification and K-ISMS certification, both in 2017. CryptoCompare currently classifies Gopax as the leading platform in the country when it comes to Factors such as legal and regulatory indicators, size of investment, quality of data delivery and commercial monitoring.
Related: South Korean crypto exchanges are required to file license applications on September 24th
Experts estimate that almost 40 of the estimated 60 South Korean crypto exchange operators will be forced to close due to new licensing regulations. The Financial Services Commission, which oversees the new regulations, backed up their claims by arguing that there is great demand from traders for more protection for their assets held on smaller cryptocurrency exchanges.
The banks have themselves denied the impending measures, arguing that it is essentially asking them to indirectly scrutinize the country’s stock exchanges by holding them responsible for issuing real name accounts. A representative from the banking industry said it was a “dangerous and expensive task” for financial institutions.