Upbit became the first crypto exchange in South Korea approved by the government
More than 60 cryptocurrency exchanges in South Korea must notify customers of a partial or full suspension of trading by Friday midnight, a week before a new regulation comes into effect. Upbit has become the first cryptocurrency exchange in South Korea approved by the government to follow the Financial Action Task Force (FATF) guide.
— 코인데스크코리아 (@coindeskkorea) September 17, 2021
Over 60 exchanges in South Korea to suspend services next week
It is known that to continue operating, and exchanges must register with the Financial Intelligence Unit by September 24 and provide a security certificate from the Internet security agency. They also have to work with banks to secure real-name accounts. This requirement is part of an effort to tighten oversight of the country’s exuberant crypto sector. Consequently, nearly two-thirds of all exchanges will have to shut down.
Exchanges that have not registered must shut down services after September 24. At the same time, those that have registered but failed to secure partnerships with banks will be prohibited from trading in Won.
Almost 40 of South Korea’s estimated 66 crypto operators are set to suspend all services. Only 28 exchanges have the appropriate system designated by authorities designed to limit any security breaches proactively.
Before that, only four exchanges – Upbit, Bithumb, Coinone, and Korbit were registered. They have also secured a partnership and are therefore allowed to make winning deals. These are the four exchanges that dominate crypto trading in South Korea. They account for more than 90% of the country’s total trading volume. And up to this point, only Upbit has been approved to operate.
Some smaller exchanges, including ProBit, Cashierest, and Flybit, have already said they will end won trading. And that they will continue operations involving only crypto trading until securing partnerships with banks.
South Korea is one of the largest crypto markets in the world. However, two-thirds of South Korean crypto exchanges are set to close due to a regulatory overhaul. As a result, investors could lose up to $2.6 billion, as AZCoin News reported.
The regulations will also affect global exchanges that offer won trading. The Financial Services Commission (FSC) sent a notice to 27 foreign cryptocurrency exchanges operating for Korean traders.
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