New crypto rules raise concerns South Korean exchanges may fight legal battle for survival

As regulatory measures in South Korea approach and the latest signals from the Korean government, Korean exchanges are expressing concerns about the moves.

In previous news, crypto exchanges are required to obtain real-name accounts from banks in order to operate under a revised version of South Korea’s Specified Financial Transaction Information Act. The financial regulator also said virtual asset operators must submit reports to the Financial Intelligence Unit (FIU) of the Financial Services Commission by Sept. 24. the FIU review period is usually about three months. Through the review, a decision is made to accept or not to accept.

Media sources indicate that the upcoming new rules in South Korea will require exchanges to have real-name accounts at local banks by September, which could force many smaller trading platforms out of the market. Industry insiders predict that of the 60 or so cryptocurrency exchanges in South Korea, only Gopax may survive, in addition to the four major exchanges of Bithumb, Coinone, Korbit and Upbit.

It is reported that South Korea requires newly registered cryptocurrency exchanges to keep real-name bank accounts, while existing exchanges must also comply with the new framework by the end of this year. Currently, only four large exchanges, Upbit, Bithumb, Coinone and Korbit, are able to operate with proper bank support, while smaller exchanges are still struggling to find bank partners. Many local exchanges have already closed due to banks’ reluctance to work with them.

Commercial banks in South Korea may consider the number of coin uploads on South Korean crypto exchanges “too high,” which raises high risks that could reduce the exchanges’ chances of getting live bank account services. According to a document released by a lawmaker, risk assessment guidelines drafted by the Korea Banking Federation state that in addition to the sheer number of cryptocurrency pairs offered, the “low credibility” tokens and “other financial services other than regular transactions” offered by crypto exchanges may also put them at high risk.

Other cryptocurrency exchanges, increasingly unhappy with what they see as “unreasonable requirements” and the “preferential treatment” given to the Big Four by regulators, will be prepared to pay for their “forced closure” if they are indeed If they are indeed “forced to close,” they will be prepared to fight a legal battle for their survival. Some representatives of the exchanges argue that the South Korean authorities have failed to develop fair regulatory requirements and that they may sue the South Korean government. Local banks are “reluctant” to do business with small digital asset trading platforms other than the country’s four major exchanges, UPbit, Bithumb, Coinone and Korbit, and as a result these exchanges feel they are being discriminated against, according to the report.

While the exchanges are hoping that the FSC and the government will soften their stance as the deadline approaches, the crypto industry’s anger is growing and the industry as a whole is accepting the dire situation that “most exchanges” are still set to shut down on September 24 unless the government compromises. Notably, the head of the Korean Financial Services Commission said on June 27 that we are considering listening to banks (to set exemption criteria). The subsequent regulation remains to be seen.

In fact, there has been a great enthusiasm for the crypto industry in Korea. A recent show called “Man With Wife’s Credit Card” debuted this week on TVChosun, the TV subsidiary of Chosun, South Korea’s largest media conglomerate. The show featured reality TV guests who personally demonstrated cryptocurrency trading and explained how mining earns revenue.

However, South Korea has also seen an escalation of measures against crypto regulation in recent times. The Democratic Party of Korea and the government are also discussing institutionalization and legislative measures for virtual assets (virtual currencies) such as Bitcoin at the National Assembly on the morning of June 23. The meeting is expected to discuss investor protection legislation that would prohibit market price manipulation and trading using undisclosed information, and require operators to be liable for damages in the event of accidents such as hacking. (Some news synthesized from Yonhap News Agency)

Posted by:CoinYuppie,Reprinted with attribution to:
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