Breaking news in crypto news suggests that most South Korean exchanges are likely to close next Friday as their operators fail to meet the country’s strict new regulations and financial oversight.
As the information shows, all exchanges are expected to obtain licenses from financial and internet regulators by September 24th. As of Monday, only 28 businesses had received Korea Internet and Security Agency (KISA) certification as the first step towards final approval by the Financial Services Commission (FSC). However, the remaining 35 exchanges are unlikely to meet the deadline, the FSC said.
For years, the crypto industry has been campaigning for “clear regulatory frameworks,” as Henri Arslanian (partner at PwC in Hong Kong) said. Discussing the issue, he found that many crypto leaders embrace rules only because they “work with the grays.” Areas that make running a business complex, from raising funds to opening a bank account. ”
However, the quick shutdown of South Korean exchanges – at least half of them – could pave the way for the emergence of crypto monopolies, which often hurts the average investor.
In addition, regulators say that crypto fraud is growing in the country, which tends to be more common. Reports show that crypto fraud increased 42% in 2020, and several crypto exchanges, including Bithumb and Coinbit, are part of it.In addition to the new regulations, the government has decided to set up a new office under the FSC and oversee the country and its digital assets. Regulators are now seeking stricter controls for the same reasons: preventing financial crime and improving investor protection.
The latest news shows that only four of the leading Korean platforms, including Upbit, Bithumb, Coinone, and Korbit, have filed their registrations with the FIU and secured both banking and certification partnerships from the internet regulator.
“The abundance of offshore options for centralized exchanges and the proliferation of decentralized exchanges suggest that the possibilities offered to traders are increasing rather than decreasing. Justin d’Anethan, Sales Director at Eqonex, said:
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