About 60 South Korean cryptocurrency exchanges are due to close or downsize their services this week

The deadline for crypto exchanges to meet the new regulatory requirements to stay open in South Korea is this week. So far, only one cryptocurrency exchange has been licensed for further operation. About 60 exchanges are expected to close or reduce crypto-related services.

59 exchanges are about to “execute”

According to the Specific Financial Transaction Information Use and Reporting Act (Special Act), cryptocurrency exchanges must be certified and registered by an Information Security Management System (ISMS) signed with the Korea Financial Intelligence Unit (FIU) by September 24th do not do this, you must stop operating immediately.

According to local press, 34 exchanges have not yet received ISMS certification, so they are expected to close completely on September 24th.

A total of 29 crypto exchanges have been ISMS certified, but only one has successfully registered with the FIU, a unit of the Financial Services Commission (FSC), the country’s financial regulatory agency.

The Financial Intelligence Unit (FIU) held its first meeting last Friday to examine the report from Dunamu, the operator of Upbit, the country’s largest cryptocurrency exchange. The commission accepted the report and made Upbit the first licensed cryptocurrency exchange in the country.

The FIU also announced that four other exchanges have filed reports in addition to Upbit: Bithumb, Korbit, Coinone and Korea Digital Exchange (Flybit). In addition, a crypto wallet operator, Korea Digital Asset (KODA), also submitted a report.

In addition, registered cryptocurrency exchanges that wish to offer transactions in won must also work with banks to verify real names and link them to bank accounts to avoid tax evasion. So far only 4 exchanges, namely Upbit, Bithumb, Coinone and Korbit, have secured banking partnerships.

Banks often do not want to work with small cryptocurrency exchanges for fear of money laundering risks, while the profits are not worth much.

This means that 25 out of 29 crypto exchanges that already have ISMS certificates can only trade crypto / crypto pairs if they are successfully registered with the FIU. You must suspend transaction service in won by September 24th and of course you will likely lose customers to competitors because of this inconvenience.

Gopax, Gdac, Hanbitco and Huobi Korea said they are still working with the bank to ensure the partnership is closed ahead of schedule.

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