The deadline for cryptocurrency exchanges to meet the requirements to continue operations under new crypto regulations in South Korea is rapidly approaching. A total of 28 cryptocurrency exchanges have reportedly been cleared by the regulators to remain open. However, only four crypto exchanges have met the requirements to offer trading in Korean won.
28 Cryptocurrency Exchanges Meet Regulatory Requirements
South Korea’s financial authorities have released a list of 28 cryptocurrency exchanges that have met the regulatory requirements to stay open past Sept. 24 under the country’s new crypto regulations.
The amended Act on Reporting and Using Specified Financial Transaction Information requires cryptocurrency exchanges to obtain Information Security Management System (ISMS) certification by Sept. 24 and report to the Financial Intelligence Unit (FIU), a division of the Financial Services Commission (FSC). Crypto exchanges that fail to do so must cease operations by Sept. 24.
Jeon Yo-seop, head of FIU’s Planning and Coordination Office, explained that given the approaching deadline:
It is unlikely that there will be additional certified virtual asset trading platforms.
The 28 exchanges that have been ISMS-certified include Gopax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax, and Okbit.
However, in order for crypto exchanges to offer trading in Korean won (KRW), they must also partner with banks to offer customers real-name verification deposit/withdrawal accounts.
So far, only the country’s top four crypto exchanges — Upbit, Bithumb, Coinone, and Korbit — have been able to secure partnerships with banks, which have been reluctant to partner with crypto exchanges due to risks including money laundering.
Crypto businesses that do not have banking partners to provide real-name verification deposit/withdrawal accounts must terminate the trading in the KRW market even if they have received ISMS certification. That means 24 out of the 28 exchanges will be crypto-only exchanges.
Financial authorities in South Korea have also distributed business closure guidelines to the cryptocurrency industry. Exchanges must notify users of the expected closing date and how they can withdraw their funds at least seven days before the closing date. They must also provide a window of at least 30 days from the closing date to allow users to withdraw their funds. Korean authorities are also reportedly monitoring crypto exchanges that are likely to shut down to ensure they return funds to customers.
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