60% of South Korean Bitcoin exchanges are about to disappear because of the new regulation
According to Financial Times, the new FSC regulations are too severe for South Korean Bitcoin exchanges. About 40 out of 60 Korean-based BTC exchanges are about to change their location or go out of crypto business. As of today, more than 60% of crypto trading platforms are not compliant with updated norms and regulations.
According to the new FSC (Korean regulator) laws, all the crypto exchanges need to get a license by September 17, being compliant with new requirements. 20 largest exchanges have already undergone this step - Bithumb, Upbit, Korbit, and 17 more licensed crypto exchanges are responsible for 90% of the overall crypto trading volumes in South Korea.
The new requirements force Bitcoin exchanges, ICO companies, and other crypto-related projects to correspond with the following demands:
to use bank accounts with real names and follow the KYC policy together with partner banks;
to certify implemented ISMS systems;
to follow the financial reporting requirements.
The South Korean regulator has chosen the course towards crypto legalization; meanwhile, the system of crypto-related laws is about to get the industry under the fullest control. Since January 1, 2022 citizens will have been obliged to inform the regulator about digital assets stored on foreign crypto exchanges. Digital currencies worth over $450 000 will become taxable.
The president of the South Korean Finance Consumer Federation commented on the upcoming changes: "The new requirements will lead to suspended trading and frozen assets on small trading platforms. Facing the possible closure, platforms are not thinking about investors. This said heavy losses are coming soon."