Korean exchanges may shut down due to new regulator regulations
As September 23 approaches, more and more South Korean exchanges are giving up trying to comply with the new regulations of the local regulator. Bybit today announced the end of support for the Korean language, and Gopax issued a press release announcing a possible closure.
On September 23, the deadline for registration of South Korean crypto exchanges with the local regulator expires, against which 70% of them have concerns about the forced closure. The regulator does not help at all, but only invites the heads of exchanges, starting from today, to notify users of a possible closure. However, most of the marketplaces are still wary of “investor flight” and subsequent problems with withdrawing funds for all clients of local cryptocurrency platforms.
To register with the local financial department, the exchanges are required to provide proof that the data of all accounts of their clients are linked to accounts in South Korean banks. The latter, in turn, do their best to refuse cooperation with companies related to the cryptocurrency industry. Especially when it comes to small and medium-sized businesses. At the same time, the country's largest trading platforms Bithumb, Upbit, Korbit and Coinone have already reported full compliance with the requirements of the regulator. Top managers in Korean banks say they are challenging the new rules because they are forced to take responsibility for opening accounts in real names, which will be extremely costly for financial institutions.
Gopax, backed by the Digital Currency Group, was one of the first exchanges to notify users of a potential shutdown. According to representatives of the exchange, they are negotiating with a Korean bank to create an account following the new rules, but are not sure that the result will be successful. Therefore, until September 24, the exchange will proceed to provide cryptocurrency trading services in tandem with the Korean won and will soon inform customers about the future work of the platform. Previously, it closed access to foreigners, since at the legislative level, exchanges are now forbidden from serving them.
Bybit was also quick to announce that it has closed access to services and currency pairs with won. In addition, from September 20 of this year, the service will stop supporting the South Korean language on its platform and will close the official Korean groups previously created by representatives of the exchange on social networks.
The crypto community can only watch how many exchanges have time to warn their investors about the imminent closure and guess what kind of losses what is happening promises the entire industry. According to preliminary estimates of experts, they will amount to more than $2.6 billion.
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