Korean commercial banks “increasingly believe” that only 4 crypto exchanges will survive the September 24 deadline – after which crypto exchanges will have to adopt anti-money laundering (AML) protocols and find a banking partner to continue operations.

There will only be 4 Korean exchanges in September

The first part of South Korea’s national crypto-specific legislation was enacted in March and requested all exchanges to adopt the instructions for authenticating banking transactions with real names. All customers of the crypto exchange must have fiat on / off bank accounts at partner banks, with all transactions, fiat and crypto, being tracked in real time. Currently only 4 major exchanges (Upbit, Bithumb, Korbit and Coinone) offer such services and time is running out for other exchanges to join their numbers.

Local banks, as previously reported, are increasingly reluctant to partner with crypto exchanges – as they have been told they must manage all of the risks involved: money laundering and security. Some have ruled out partnering with exchanges after September 24th.

Only 4 Korean exchanges will survive September – rising wave of dissatisfaction

Hanguk Kyungjae said banks were disappointed with statements made by the chairman of the Financial Services Commission, Eun Sung-soo, last week. Eun rejected calls from bankers complaining that putting the full blame in money laundering cases is an excessive and unrecognized crypto business. “For now,” says Eun, it makes sense for banks to carry out their own risk assessment and treat exchange customers at their own risk.

However, banks fear that money laundering movements on the stock exchanges – or their customers – could be hit hard. The media quoted unnamed bankers as expressing concerns that confirmed AML violations could eventually lead them to receive instructions to cease their overseas operations, with the worst-case scenario in closing bank branches overseas.

A banker who trades in real name verified crypto exchange linked accounts was quoted as saying:

“Unless regulators intend to exempt banks from taxes, the risks involved in conducting transactions with providers of virtual assets will increase as banks are extremely reluctant to allow new transactions. It is not possible to form alliances with other new exchanges due to the speed of the review and the position of the authorities. “

Last week, a rival, a stock exchange official, criticized the “exceptionality” of Upbit, Bithumb, Korbit and Coinone – claiming the team was trying to show regulators that it was ready to move forward by passing the Travel Rules Financial Action Task Force improve (FATF) ahead of next year’s deadline while others struggle to keep up.

Exchanges outside of the Big Four lament their fate, with an unnamed official on an exchange saying the decisions were “unfair,” adding:

“No matter how much time, money, and effort the exchanges expend to meet the requirements, if the bank does not agree, the exchanges must be closed. Even for those who don’t endorse cryptocurrencies, the industry is still legal unless the field is banned. “

The media added that “the voices of discontent are getting louder,” with some claiming that the “damage” caused by the restructuring of the exchange system “ultimately” falls back on the customers of the crypto exchanges.

Some exchanges have stated that legal action could be taken if the government is unwilling to turn it down.

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