Huobi Korea Closes, Crypto Regulation Becomes The Culprit

JAKARTA - Huobi Korea, one of South Korea's largest crypto exchanges, announced it would stop its operations from December 29, 2023. This decision was taken due to increasingly stringent pressure on crypto regulation in various countries, including South Korea.

Huobi Korea customers are given until January 29, 2024 to withdraw their funds from the exchange. Unfortunately, this exchange only supports withdrawals to foreign exchanges, not to local crypto wallets. This shows tensions between Huobi Korea and local regulators.

"In order to provide better virtual asset exchange services, the company has restricted the use of some services and updated brands and systems. However, considering the current business environment, the company's position is that this will halt virtual asset exchange services unavoidablely," Huobi Korea said in a statement.

Huobi Korea guarantees that customer funds are safe and withdrawals will continue until completion. However, until now this exchange is doing wallet maintenance, so some crypto coins cannot be withdrawn. The Huobi Korea Exchange promised to immediately address this issue.

Huobi Korea was founded in 2017 as a subsidiary of Huobi Global, a giant crypto exchange from China. However, since January 2023, Huobi Korea has been operating independently from Huobi Global, who is also experiencing financial difficulties and employee cuts.

Strictly Affected By Crypto Regulations In South Korea

The closure of Huobi Korea is the impact of increasingly strict crypto regulation in South Korea. The South Korean government plans to enact a Virtual Asset Investor Protection Act this year, which will set high standards for crypto exchanges.

One of the conditions is that crypto exchanges must partner with local banks to issue real name accounts for their customers. The goal is to prevent money laundering and other illegal practices. However, many local banks are reluctant to cooperate with crypto exchanges for fear of legal risks and reputation.

As a result, many crypto exchanges and crypto companies in South Korea are forced to stop their operations or look for other markets. Some examples are Cashierest, Coinbit, and CoreDAX. Meanwhile, South Korea's leading crypto exchanges, such as Upbit, Bithumb, Coinone, Korbit, and Gopax, still survive by controlling more than 99 percent of the total trading volume.

South Korea is one of the countries with high crypto activity. According to data from Statista, about 14 percent of South Koreans own crypto assets by 2023, the second-highest in the world after Nigeria. The value of the crypto market in South Korea reached around $2.6 billion (IDR 40.5 trillion) by the end of 2023.