Crypto Exchanges in South Korea Might Be Shut Down

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  • Chairman of the Finance Committee in South Korea said crypto exchanges in the country should register to operate
  • He warned that about 200 exchanges haven’t yet started the registration process and this puts them at the risk of being closed down
  • The South Korean government had announced a crackdown on “illegitimate crypto businesses” from April to June

Eun Seong-soo, Finance Committee chairman in South Korea, said in the country congress that more than 200 crypto exchanges are at risk of being shut down in September. He stated:

About 200 crypto exchanges in S.Korea should register to operate but none of them has completed the process yet.

Earlier this month, the South Korean government, in an act to regulate crypto exchanges, required them to register with financial authorities and comply with anti-money laundering (AML) regulations. The legislation is addressed as Financial Transaction Reports Act (FTRA) and was aimed to restrict crypto trading in March of 2020, but it only went into effect on March 25, 2021.

Now, Eun Seong-soo, warning those exchanges who failed to follow the relevant regulations, speaks about the possibility of shutting down their businesses in September. He also mentioned plans to impose taxes on cryptocurrency trading and that the government cannot protect every crypto investors:

Investing in crypto is speculative so it’s hard for the government to protect every investor who also invested in the virtual assets.

Crypto Regulations in Korea

South Korea, earlier this month, shared the country’s plans to crack down “illegitimate crypto businesses.” The country set a “special enforcement period” which is from April to June, and during this period authorities will be targeting all “illegal activity involving virtual assets.”

Besides, the country introduced new laws under the bill “Special Money Act” for crypto traders, offering stricter regulations, new KYC policies, a tax plan, and requiring all crypto businesses to register in the country.

The revised bill of the “Special Money Act” was preceded on March 25 and will take effect from September 24, after a six-month grace period. The amendment primarily demands crypto businesses to meet specific requirements such as information protection management system (ISMS) certification and issuance of real-name accounts.

Harsh Comments by Eun

Eun also had some harsh comments regarding the crypto exchanges that have not yet registered with the government under the Special Money Act, he said:

There are dogs, but they can all be shut down. They could be shut down suddenly in September.

Eun continued his comments saying the crypto market doesn’t protect investors while the stock market and the traditional markets do. These comments come at a time when the crypto market in South Korea is booming, and some days, the crypto trading volumes surpass the stock market trading volumes.