Many of South Korea’s 200 crypto exchanges are facing “existing challenges” as they struggle to meet the standards, launching one of the world’s largest cryptocurrency markets.
To obtain a business license as a legitimate platform, Korean exchanges are required to partner with local banks to open specific customer bank accounts. But banks are concerned that this could put them at risk of digital currency fraud.
Now, the last day of September 24 from the Financial Services Commission is approaching, and just a few exchanges are expected to meet the requirements, reflecting the pressure of the thousands of crypto exchanges that have spread around the world as global regulators continue to market.
“Most of [global crypto] companies fear a major reversal similar to that of South Korea, “said one crypto market official.
The crypto trade in South Korea is controlled by four major exchanges – Upbit, Bithumb, Korbit and Coinone. They are expected to survive because they have partnered with banks such as Shinhan, NH and K-Bank to provide real cryptocurrency trading accounts. Upbit and Bithumb say they are planning to register at FSC.
The small exchange says the new government favors those who spend the most on their prices. “We are facing challenges. We want our business to be legal but banks are not willing to give us real accounts,” said Lee Chul-ie, chief executive of Foblgate, the country’s fifth largest headquarters with 100,000 members.
“Some problems come when all the exchanges are left to operate on gray. Maybe we can do our business at sea. ”
But some analysts say appropriate adjustments are needed because major exchanges in the country have no means of self-defense and transparency.
“The marketplace is packed with vendors. Government registration is important to clean up the market even if there is a temporary setback, “said Hwang Seiwoon, a researcher at the Korea Capital Markets Institute.
Closure of temporary exchanges could destabilize the crypto industry in South Korea, one of the world’s best-known markets, as the country joins the country. global degradation of electronics, Trees that have been under pressure since mid-April later a surge earlier this year.
Young South Koreans have proven to be keen buyers of real estate, which has helped to raise the price of bitcoin in Korea compared to other countries such as the US. This is a big change but it went up above 20% last week, according to CryptoQuant data providers.
“The new law puts us right there,” said a senior bank official. “It will be difficult to open new crypto-currency exchanges, given the dangers of crypto currency trading, unless the government gives us clear guidelines.”
Bankruptcy plans are backed up by recent warnings from financial regulators about cryptocurrencies. Lee Ju-yeol, Bank of Korea’s ambassador, said in February that cryptocurrency was not a real “value”.
Eun Sung-soo, the country’s chief financial officer, told parliament last month: “My opinion is that [investors] Do not enter [this market]. Unspent funds cannot be recognized as money so the government cannot protect those who sell goods. ”
South Korea has the highest number of crypto traders, with daily interest rates exceeding $ 20bn in local markets, more than the short-term market share of the country’s shareholders.
But it is still an unconventional market, which has urged regulators to deal with “anything illegal about real things” during the “critical period” from April to June.
The government is also planning to levy a 20% tax on more than Won2.5m ($ 2,200) in cryptocurrency transactions, starting next year.
This has not stopped young people from buying digital currency compared to youth unemployment and rising house prices.
“The stock market makes me a little nervous. You can quickly get rich with crypto currency even though the risks are huge, “said MH Chang, a 30-year-old tennis coach, even though the money earned in Won30m in cryptocurrencies has fallen in value recently.