South Korea – 29 crypto exchanges have “survived”, but 37 will close down

South Korea: The deadline for crypto exchanges has expired as long as the requirements to remain open and officially operate under the new regulation have been met.

Twenty-nine “lucky ones” have successfully met the requirements and can continue to operate, but only four of them can trade in the official currency – Korean Won.

The new regulation has entered into force

The Act on the Use of Specified Financial Transaction Information required crypto exchanges to obtain information security certifications (ISMS) and the submission of a report to the country’s FIU until midnight on 24 September. Exchanges that plan to offer trading in domestic fiat currency must enter into cooperation with local banks so that users act under a true identity.

Financial Services Commission (FSC) is the highest financial regulator in the state. They stated that 29 crypto exchanges received an ISMS certificate and submitted a report to the FIU before the deadline. Their requests will be processed within three months.

All companies will also be required to establish a system for the adoption of global anti-money laundering (AML) standards, the so-called “travel rule“. This recommendation was issued by the Financial Action Task Force (FATF), intergovernmental supervision of money laundering.

South Korea has 4 crypto exchanges in cooperation with banks

Other 4 (Upbit, Bithumb, Coinone and Korbit) of the 29 exchanges will officially cooperate with the banks, where all accounts will be transparent, which will of course also have a true identity. Working with banks is needed to ensure that exchanges offer traders the opportunity to buy and sell cryptocurrencies in exchange for the Korean Won. The remaining 25 can work only with cryptocurrencies.

Bithumb, Coinone and Korbit are developing a common system that will follow the “travel rule”, while UpBit, the biggest crypto exchange in South Korea, is already working on its own system independently.

After Friday’s deadline, 37 unsuccessful crypto exchanges have failed to meet regulatory requirements and must close. Those who fail to do so will face fines of up to 50 million won (approximately € 36,000) or may go to prison for 5 years.