According to the FSC, platforms that do not comply with the procedures by the established date will have to face the partial and definitive cessation of their operations in South Korea. The measure also reaches international exchanges that work within the country.
The Financial Services Commission (FSC) of South Korea gave an ultimatum to the exchanges that work in the Asian nation.
The financial Services Commission highlighted that these exchanges would have until September 24 to make the corresponding registration and comply with current legal frameworks, so they would not have to stop their operations and face the consequences.
The FSC mentioned the subject in a recently published statement. It invited the more than 60 exchanges that operate within the country to adopt the regulatory measures established by the body.
To sustain their operations, these companies must register with the Financial Intelligence Unit before September 24, bring the required collections, and partner with local banks to open the respective bank accounts to acquire user funds.
In this sense, the FSC was quite clear; since it indicated that exchanges that do not intend to adhere to the regulations must close their services once the period established to comply with said measures has ended.
Therefore, he invited these companies to notify their clients no later than this September 17, since they could face the suspension of their commercial services:
The FSC clarified that if some or all services get closed, they must notify clients about the estimated closing date and procedures to withdraw their funds at least one week before the closure takes effect.
Reactions Among South Korean Exchanges
According to polls presented by local media, not all exchanges working in South Korea agree with the measures that the FSC has been highlighting.
Out of an estimated total of 66 exchange services, around 40 are doing the proper procedures to comply with the current regulations. There are only 28 exchanges that satisfactorily meet the requirements to guarantee the safety of users.
Among the duly registered exchanges, Upbit, Bithumb, Coinone, and Korbit stand out, the four platforms that bring together more than 90% of the commercial volume handled in the country.
However, the possibility of many commercial platforms deciding not to adjust to the measure could also impact the local market.
A report released by a local media studied losses for investors of more than USD 2,600 million. The report also studies the exit from the circulation of some 42 digital currencies that work through exchanges with small volumes of operations.
In this regard, the professor and director of the Cryptocurrency Research Center for the University of Korea, Kim Hyoung-Joong, clarified that 90% of operations in the country move with cryptocurrencies other than Bitcoin, so there could be struggles for investors who cannot freely trade with their altcoins.
The regulations that the FSC intends to implement are in two blocks. On the one hand, there are those exchanges that can operate the crypto/crypto exchange, and on the other, those that are allowed to buy/sell cryptocurrencies with fiat money.
By: Jenson Nuñez