South Korean exchanges fear closure due to stricter regulation – Bits Media

South Korea's small cryptocurrency exchanges fear, that the reluctance of banks to cooperate with them will make it difficult to comply with regulatory requirements of regulators and will lead to the closure of trading floors.

South Korea is considered one of the most active cryptocurrency markets in the world. The regulatory bodies of the country are in a state of "combat readiness", Taking various measures for enhanced cryptocurrency control. In March 2020 The year of the National Assembly of South Korea approved the amendments to the law on reporting and the use of information on financial transactions.

According to these amendments, Platforms for the trade of cryptocurrencies are required to comply with the leading principles of the group for the development of financial measures to combat money laundering (FATF). To 24 September Exchange should obtain permission to work in the country from the Commission on Financial Services South Korea (FSC) and Korean Internet and security agency (What).

Besides, According to the new rules, Virtual assets service providers (VASP) must be without fail to identify the personality of customers, which requires partnership with financial institutions. Large Korean exchanges, Such as UPBIT, Bithumb, Raven и coinone, already interact with banks on this issue and prepare for registration in FSC. However, small trading platforms are faced with problems.

Despite the popularity of digital assets in South Korea, Financial organizations still do not want to work with cryptocurrency firms. Banks are afraid, that will be held accountable for any illegal activity, associated with cryptocurrencies. Trade platforms, in its turn, Concerned about those, that they have less than four months left, To have time to ensure compliance with all regulatory requirements.

“We are experiencing a crisis of existence. Trading platforms are ready to legitimize their activities, But banks do not want to meet them and cooperate with them. The new regulation regime favors only the development of large platforms. There will be much more problems, If small exchanges begin to work "in the shade". Without a banking partner, we will have to transfer business abroad, -said the CEO of the cryptocurrency exchange Foblgate Lee Chol-and (Lee Chul-ie).

However, some experts consider, that there are too many cryptocurrencies trading in South Korea. Therefore, the introduction of more stringent regulatory requirements will allow “natural selection” and leave several key adjustable sites. This will improve investors and increase transparency in the cryptocurrency market.

South Korean regulators enhance control over cryptocurrency operations to combat tax evasion. This month, the Central Bank of South Korea reported, what will track the transactions of local traders, Using bank account data.