JAKARTA – The South Korean government has tightened crypto trading regulations. They require all crypto exchanges to register with the Financial Intelligence Unit by a deadline of 24 September, otherwise the exchange will be closed.
The government intends to provide security certificates for listed exchanges so as to guarantee local investors. In addition, crypto trading platforms are also required to cooperate with banks to verify the user's real data to reduce the rise of fake accounts on the exchange.
For crypto exchanges that fail to cooperate with banks, they are prohibited from opening trading services in won currency. Moreover, they have to announce the closing date to their users this Friday 17th September. This is done before seven days of exchange closing.
"If some or all services need to be closed, (the exchange) must notify customers of the expected closing date and withdrawal procedures at least seven days before closing," the Financial Services Commission said last week as quoted by Reuters.
Of all crypto exchanges, around 40 exchanges are reported to be suspending their services. Meanwhile, 28 other exchanges only have a security certificate from the internet security agency. Even so, the 28 exchanges have not yet established partnerships with banks.
So far, only 4 crypto exchanges have passed, namely Upbit, Korbit, Coinone, and Bithumb. The four exchanges have been registered and have partnerships with banks as instructed by the government.
Several small exchanges will reportedly soon stop trading crypto services with won including Flybit, ProBit, and Cashierest. However, all crypto exchanges involve trading digital won until they can form partnerships with local banks.
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