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11 crypto exchanges in South Korea might not get regulatory approval

Industry sources claim that it will be impossible for these crypto exchanges to get the FSC’s approval for the continued operations of their businesses in the country.

Seoul, South Korea / Image by: Wikimedia Commons

Tue, 03 Aug 2021, 06:02 am UTC

South Korea’s Financial Services Commission (FSC) is reportedly planning to implement stricter regulations on the country’s crypto industry. Almost a dozen mid-sized crypto exchanges are under increased scrutiny due to alleged illegal activities.

The FSC is planning to suspend the operations of 11 South Korean crypto exchanges for alleged illegal activities and using fraudulent collective accounts, according to The Korea Herald. The regulator plans to notify their activities to the prosecution and the police.

Anonymous industry sources told the publication that the FSC has not yet disclosed the names of the crypto exchanges being targeted. However, they claim that it will be impossible for these firms to get the FSC’s approval for the continued operations of their businesses.

Insiders have predicted the closure of some exchanges later this due to their failure to open real-name accounts for their clients. However, this won’t include big platforms such as Bithumb, Coinone, Korbit, and Upbit as they have already made arrangements with local banks to open real-name accounts for their clientele, which is a prerequisite for FCS’s approval.

There have been reports of smaller crypto exchanges shutting down their services. For instance, Bitsonic announced in its Telegram channel that it would temporarily cease operations due to “internal and external issues,” according to Cointelegraph.

“Once we are done with the renewal, we expect to achieve Information Security Management System,” the company added. ISMS, a set of procedures aimed at minimizing security breaches to customer data, is also another prerequisite for crypto exchanges that want to continue their operations in South Korea.

Some exchanges, however, have opted to close down shop permanently. For instance, the local crypto trading platform, CPDAX, said that it would cease its operations by September 1, 2021.

“It is not a temporary but a permanent measure to close business,” the company said. “Those who possess cryptocurrencies in the account must withdraw them before 3:00 p.m. on August 31,” the company said.

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