HomeCryptoSouth Korea Strengthens the Supervision of Crypto Exchanges,Nearly Two-thirds of Exchanges Forced...

South Korea Strengthens the Supervision of Crypto Exchanges,Nearly Two-thirds of Exchanges Forced to Close with $2.6B in Losses

The South Korean Financial Services Commission (FSC) has begun to tighten the supervision of native and abroad cryptocurrency buying and selling platforms in South Korea, resetting a brand new deadline on September 24, according to Financial Times.

It is reported that this regulation will terminate practically two-thirds of unapproved South Korea’s cryptocurrency exchanges for authorized transactions. Approximately 40 of South Korea’s 60 cryptocurrency service suppliers could also be shut down, which is able to trigger merchants to up to $2.6 billion in losses.

South Korea’s monetary regulator issued an official doc on September 6 stating that VASP wants to register its enterprise with the authorities. 

The definition of VASP covers crypto exchanges, pockets suppliers, monetary service suppliers in connection with the problem, provide and sale of digital belongings, and different potential enterprise fashions.

The official announcement wrote that:

“For VASPs that are planning to operate a virtual asset trading platform but are not planning to offer KRW-based or other fiat currency-based exchange services, the authorities advised them to terminate their fiat currency-based exchange services without delay by the September 24 registration deadline. When filing their registration report, these VASPs should submit a document confirming the termination of their fiat currency-based exchange services.”

The regulatory company recommends that these VASPs that can’t meet the necessities and terminate operations ought to problem a enterprise termination discover one week in advance (September 17) to reduce damages to customers finish.

Kim Hyoung-Joong, a professor and head of cryptocurrency analysis from Korea University, mentioned that the supervision is extraordinarily doubtless to shut down 42 Korean won-denominated cryptocurrencies referred to as “Kimchi Coins.”

At current, South Korea’s crypto buying and selling platforms are primarily concentrated in the 4 main exchanges, Upbit, Bithumb, Korbit and Coinone, which cowl greater than 90% of the complete digital asset buying and selling quantity. Therefore, smaller exchanges could also be closed, inflicting some buyers’ encrypted belongings to be frozen in the alternate and endure big losses.

“Huge investor losses are expected with trading suspended and assets frozen at many small exchanges as customer protection will not likely be the priority of those exchanges facing an imminent closure,” The president of Korea Finance Consumer Federation Cho Yeon-haeng mentioned.

Image supply: Shutterstock

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