Breaking: All 200 South Korean Exchanges May Shut Down Says Regulator

Prashant Jha
April 27, 2021 Updated June 29, 2022
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
south korea crypto regulation

The 200 crypto exchanges in South Korea may face closure by September as per Eun Sung-soo, the chair of South Korea’s Financial Services Commission. The decision would be based on the new anti-money laundering laws(AML) that came into force last year and also included cryptocurrencies. As per new regulations, crypto exchanges operating in the country must implement all the AML guidelines and partner with local banks, and become information security management certified.

The government opened the registration window from March 25 for crypto exchanges to obtain their virtual asset service provide licenses, none of the 200 exchanges have applied for the license, and the final date of approval has been set for September 24. If crypto exchanges fail to register themselves by the end date, they would have to shut their operation.

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Would New AML Regulations Create a Hurdle for Growing Crypto Ecosystem in Korea?

South Korea is one of the most active crypto markets in the world also famous for the Bitcoin ‘Kimchi’ premium. Kimchi premium is the Bitcoin price difference between Korean exchanges and American exchanges which at the peak was around 20% and has come down to below 2%. The new AML regulations threaten to take away the budding market from South Korea.

At present, out of 200 exchanges, only 4 top crypto exchanges have a partnership with local banks. The regulatory body in the country has been recently quite critical of the cryptocurrency space despite the majority of the world changing their passive stance and looking to formulate better crypto regulations. The South Korean regulator recently said that cryptocurrencies are more volatile and speculative than other assets.

South Korea had also imposed a 20% tax on crypto gains. Many other countries have tried taking a similar approach towards digital assets but have failed miserably and have gone back to regulate keeping wider adoption in mind. America’s similar approach leads to many established crypto companies move out of the States.

 

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.