FSC regulation review is expected to close 40 crypto exchanges in South Korea
AFurther regulatory overhaul could put 40 of South Korea's 60 stock exchanges out of service after companies are not expected to meet the conditions proposed by the Financial Services Commission (FSC). This action could also affect holders of locally used "kimchi" coins, who will not be able to exchange them for fiat on other exchanges. This could lead to losses of more than $ 2.6 billion.
South Korea 's exchange options to cut dramatically
Regulatory overhaul could significantly reduce the number of exchange operations in South Korea. According to FT , it is expected that 40 of the 60 exchanges that operate in the country will be closed due to the impossibility of comply with the new regulatory framework published by the Financial Services Commission. This rule, which has a deadline of September 24, establishes that all exchanges must register with the institution to operate in the country.
However, many of these exchanges have no way to comply with it 's requirements to do so. The law states that every crypto exchange must partner with a bakery institution to open real name bank accounts for customers. However, the banks refused to do so to avoid being linked to money laundering cases.
Closures will affect local tokens
This crackdown will also have unintended consequences for local investors. The farmIf small exchanges fail to comply with these rules, Korean investors could lose $ 2.6 billion. This is because these exchanges list the so-called "kimchi coins", a group of 42 small alternative cryptocurrencies that are only used by local investors. If these exchanges close, the liquidity to trade these coins will disappear.
Cho Yeon-haeng, president of the Korea Finance Consumer Federation, said:
International exchanges are also affected by measurement and must be registered with the FSC. The institution told the exchanges that before shutting down, they must notify users on September 17. The measure will further centralize cryptocurrency services in the country, with Upbit, Bithumb, Korbit and Coinone the biggest exchanges, likely capitalizing on the exodus of customers to licensed platforms.
What do you think of theavalanche of trade closing services in South Korea in the coming weeks? Let us know in the comments section below.