South Korea cracks the whip on crypto exchanges as prices tumble

Karthik Subramanian

South Korea’s Financial Services Commission has begun to crack its whip on virtual asset service providers, which basically means the cryptocurrency exchanges, and has asked them to register with itself by September 24.

It also goes on to specify that those exchanges and platforms that are not ready to offer Korean currency-based operations should stop providing the services for the same and they should not be dealing with such fiat currencies any longer unless and until they get registered and licensed to carry on the same. For those who decide to shut it down, the FSC has said that they should be submitting an undertaking that they have done so.

The FSC has also said that those who shut down such operations would need to do so in a manner that the users are not affected by it by giving proper intimation and enough time for the users to learn and understand the new changes and also to withdraw the funds that they want to.

This announcement has come as a big blow not only to the crypto exchanges and traders in South Korea but for the entire crypto ecosystem as such. South Korea has generally been very supportive of the cryptocurrency ecosystem over the last couple of years and the exchanges in the country have been some of the most active ones in Asia during this period with transaction volumes at these exchanges being one of the highest in Asia. This move is expected to affect around 40 out of the 60 crypto exchanges in South Korea and they are expected to shut down in the coming months.

“A situation similar to a bank run is expected near the deadline as investors can’t cash out of their holdings of ‘alt-coins listed only on small exchanges,” said Lee Chul-Yi, head of Foblgate, a medium-sized crypto exchange. “They will find themselves suddenly poor. I wonder if regulators can handle the side-effects.”

Those coins/tokens that are denominated in the Korean won currency are likely to be removed from the exchanges which means that they also would need to shut down. As a result of this announcement, we have seen a large fall in the crypto prices in the morning as a lot of transaction volume is going to dry up from the crypto industry as the Korean won is the third most used fiat currency as far as crypto trading is concerned.

Read this next

Digital Assets

Ripple and Lithuanian FINCI partner for XRP-based payments

Ripple is looking to expand its presence in Europe, forming a new partnership with Lithuanian electronic money institution FINCI.

Digital Assets

Crypto.com enables Shopify merchants to accept crypto payments

Crypto.com has integrated with Canadian e-commerce giant Shopify so global merchants can accept crypto payments and save on processing fees through cash-final settlements.

Institutional FX

FX volume drops 13pct at CLS Group in April 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in April.

Crypto Insider, Opinion

Regulation: The Gold-Standard for Crypto-Assets

When the US supervisory authority SEC allowed an investment product referencing Bitcoin futures to be traded for the first time last October, this was widely perceived as a signal that cryptocurrencies had finally become established as an asset class.

Executive Moves

Solid hires FX industry veteran Darren Barker for multi-bank ECN’s business development

His curriculum vitae includes former roles at Cantor Fitzgerald, Sucden Financial, R.J. O’Brien, Jefferies, Natixis, Unicredit, J.P. Morgan, Raiffeisen, RBS International, UBS, Deutsche Bank, and Citi. 

Inside View

Mihails Safro, xpate CEO: Tips sellers need to know to overcome compliance obstacles

The unprecedented growth of e-commerce changed shopping dramatically last year. Many sellers suddenly faced a rapidly growing number of customers who had to stay home during the lockdown. When some clients adopted Netflix and Spotify as part of a daily routine, others ventured into online business. Robinhood alone saw a whopping 6 million rise in user numbers in 2 months. 

Institutional FX

BMLL delivers Level 3 data to Kepler Cheuvreux for order book analytics and algo performance

The solution covers more than 6.5 years of harmonised historical data from 65 venues and combines it with easy to use APIs and analytics libraries in a secure cloud environment. 

Digital Assets

Crypto Is An Invaluable Tool In The Fight Against Financial Oppression  

Crypto has proven itself to be much more than just a hot investment. Indeed, some say it’s poised to play a critical role in the future of finance

Executive Moves

Parameta appoints Head of Benchmark and Indices with a focus on ESG and rates

The firm said building out its benchmarks & indices offering will now be a core priority, with a particular focus on the ESG and rates space.

<