Most cryptocurrency exchanges in South Korea will shut down. The country’s top financial regulator has laid down stringent regulations for crypto investment platforms. And, cryptocurrency exchanges are now finding it extremely difficult to comply with.
According to the new rules, all cryptocurrency exchanges in the country will have to secure a valid license to operate. The license will be issued by the country’s top financial and Internet regulators. However, only a few exchanges have managed to secure a preliminary license from Korea Internet and Security Agency (KISA), they are yet to get the license from Financial Services Commission (FSC).
South Korea has been amongst a very liberal crypto jurisdiction for blockchain startups. However, the challenges are many and recently the scams have increased putting South Korean investors at significant risks. The increase in investment scams has driven the country’s financial regulators to push for stricter regulations.
The new rules also mandate cryptocurrency exchanges to partner with a local bank that will have control over the remittances. Even the political figures in the country have now started expressing concerns over investor protection.
Cryptocurrency exchanges in South Korea have until next Friday to ensure compliance with the new regulatory framework, failing which they will have to shut operations. Currently, the majority have not complied with the recent guidelines from the FSC. It is likely that over 60 cryptocurrency exchanges in South Korea will cease to operate or suspend operations by next Friday.