60 crypto exchanges in South Korea have been asked by the regulatory body to either partially or completely halt their services and inform the customers about it by Friday. The shut down of these exchanges comes as they failed to comply with the latest set of regulations that come into effect from next week.
In order for crypto exchanges to remain operational, they must register with the anti-money laundering agency Financial Intelligence Unit by September 24 and partner with banks to offer real-name bank accounts. Only a handful among hundreds of crypto exchanges in S.Korea has managed to fulfil the requirements as per new AML guidelines and the remaining hundreds of other small and medium crypto exchanges are set to close their services.
The chief regulatory body of the country Financial Services Commission (FSC) in a notification has said,
“Should some or all services need to be closed, (exchanges) should notify customers of the expected closing date and procedures to withdraw money by at least seven days before the closure,”
S.Korea Intesnifes Crypto Crackdown on Non-Compliant Exchanges
S.Korea released a new AML guideline passed in January this year that requires crypto exchanges operating in the country to register with the anti-money laundering authorities and obtain a license. In order to get a license, these exchanges must do away with shadow banking and fulfill strict KYC policies to ensure to no funds are unaccounted for.
The first deadline was set in March that most of the exchanges failed to fulfill in hopes that the regulators would re-think the strict policies. However, FSC only extended the deadline to September without giving any concession with its compliance policies. As a result, most of the small and mid-sized crypto exchanges would have to shut down as they cannot afford to fulfill all the compliance requirements.