As part of the country’s new regulations for companies that are involved with digital assets, any company that didn’t meet the requirements before 17th of September 2021 midnight should be shut down a week after. Well lots of crypto exchanges didn’t meet these requirements and it’s expected that 60 or more of these crypto exchanges will be shutting down. The authorities also told these crypto exchanges to notify their customers for withdrawal. This is the latest in South Korea.
The requirements needed for crypto exchanges to perform in South Korea involve lots of things like getting registered with the Financial Intelligence Unit, having an account real name that requires bank partnership. This part that requires partnership with bank, is expected that users who want to get involved with the withdrawal and deposit of funds on the the crypto exchange must do so using their real name. They suggested that this part was important to reduce the risk of money associated crimes like money laundering, embezzlement and other things. Having a security certificate gotten from the internet security agency is another requirement. Some exchanges have been successful with achieving some of the requirements but haven’t been able to partner with the bank for real name accounts. This will restrict their activities also but not shut it down, they will only be prohibited from trading or transacting in Won.
Just few of the crypto exchanges have been able to provide the requirements and will be allowed to operate freely. The crypto exchanges are just four and their names are Bithumb,Korbit, Upbit and Coinone.
Exchanges have not been able to comply to these new rules because it’s a lot for them to handle. Getting all these requirements will certainly cost these exchanges lots of money and probably some of their time. How can a regulation give a short notice for exchanges to acquire certain certifications that require 3 - 6 months to get. This is another way the government regulations are using to crack down crypto exchanges.
Although this act will cost these exchanges money after they get shut down but some of them will try to reopen their services after getting these requirements. This is just a phase for them I guess, as most of their customers will be migrating to crypto exchanges that have been fully certified by the regulators.