According to a press statement released by South Korea’s Financial Services Commission (FSC), over 20 crypto exchanges operating within the Asian country could cease operation as the September 24 deadline for crypto regulation draws near.
The regulator noted that 24 out of a total of 63 crypto exchanges in Korea could shut down in less than a month. The stated number are those exchanges that are yet to comply with the various regulatory requirements enforced on them months ago.
Defaulted exchanges did not comply with regulatory requirements
Six months ago, the FSC had requested that crypto exchanges within the country meet up with an act enforced in the early period of the year. Then, the regulator had given an ultimatum of September 24 for these exchanges to prepare a report for the Financial Intelligence Unit (FIU).
However, the exchanges the regulator listed failed to comply with this directive as they failed to provide the first requirement expected of them which is to get the Information System Management System (ISMS) certificate from Korea Internet & Security Agency (KISA). The certification would stand as evidence that these exchanges can protect their user’s information.
With less than a month left before the end of the ultimatum, it would be difficult for the 24 exchanges to comply with the directive as it takes a minimum of three months for the license to be approved.
The press statement also highlighted that 18 other exchanges currently have their application under review while 21 of them are already certified by KISA. The statement added that there is every possibility that these applications could still be declined by the agency which means that their operations could still be shut down after the stipulated deadline.
A notable name on the list of the exchanges includes the Korean division of Singapore’s DigiFinex. Other exchanges on the list are several small exchanges that have suspended their operations within the country.
Exchanges with the ISMS certification were also warned by the FSC that the certificate does not give them a free pass. The South Korean regulator statement added that there are other regulatory issues like winning a bank contract for their users that the crypto exchanges have to comply with.
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