South Korea’s top financial regulator will shut down 11 cryptocurrency exchanges allegedly involved in fraudulent bank account schemes, local media reported. Meanwhile, the deadline for all crypto exchanges to comply with the country’s regulations is drawing near and most of them have not been able to meet the requirements.
11 crypto exchanges may be shutting down
- South Korea’s top financial regulator, the Financial Services Commission (FSC), will reportedly shut down 11 cryptocurrency exchanges, the Korea Herald reported on Monday, citing unnamed industry sources.
- 11 crypto exchanges allegedly used fraudulent collective bank accounts and the FSC plans to prosecute the alleged illegal activities and notify the police, sources said, making it impossible for the exchanges to get approval from the FSC to continue their business. Will happen. The names of the exchanges have not been disclosed.
- Crypto exchanges must obtain approval from the FSC by September 24 to continue operating. Some attempts to provide more time for exchanges to comply with the rules, such as that of the People’s Power Party congresswoman Cho Myeong-hee, who hoped to extend the deadline to December 24, have been rejected. The FSC stands by its September 24 deadline, stating that crypto exchanges have already been given a grace period of six months.
- One of the requirements for crypto exchanges is to partner with local banks to open real-name accounts for customers. However, banks have been reluctant to partner with exchanges other than the top four: Bithumb, Upbit, Coinone and Korbit. Without the ability to offer real-name accounts, exchanges would have to cease operations.
- Several medium-sized exchanges have already announced plans to shut down or suspend services, with the publication reporting that Darlbit went out of business on July 15. CPDAX said on 30 July that it would terminate services on 1 September, emphasizing: “This is a temporary but not permanent measure to close the business. Those who have cryptocurrency in their accounts will have them at noon on 31 August.” Must be taken out before 3:00 pm.”
- Another requirement is that exchanges must obtain an Information Security Management System (ISMS) certificate. Many crypto exchanges in South Korea also find it difficult to meet the requirements of this certification. The publication noted that for example, the Bitsonic exchange announced on July 30 that it would temporarily stop providing services in order to upgrade its service systems to meet ISMS requirements.
What do you think about FSC closing 11 exchanges and many more will have to close due to inability to comply with the upcoming regulations? Let us know in the comments section below.
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