South Korea Narrows Down 11 Cryptocurrency Exchanges To Shut Down
August 03 2021 - 05:12AM
NEWSBTC
The Financial Services Commission, the top financial regulator in
South Korea, is supposedly staging a closedown for some
cryptocurrency exchanges. This move is linked to allegations of
fraud in these exchanges. The first move from the FSC is to
temporarily stop the operations of about 11 average South Korean
crypto exchanges. Reporting on Sunday, The Korea Herald, a local
news agency, claimed that the FSC move is based on some unclear
operations by these exchanges. Related Reading | Commercial Paper
Reserves Of Tether Under Heavy Regulatory Scrutiny The report has
it that these exchanges all allegedly had fraudulent collective
accounts and some illegal activities. According to a news
publication, while citing unknown industry sources, there are still
no name disclosures of the exchanges. However, these exchanges are
likely never going to get approvals for operations from the
authorities. From the news sources, the FSC will decline the
operational approval for all the affected crypto exchanges.
Furthermore, this South Korean financial regulator plans to enforce
stricter regulatory actions on minor exchanges. The news on the
supposedly crash comes in the middle of the recent suspension of
operations by some minor crypto exchange in South Korea. One of
such suspensions is the announcement made by Bitsonic, a local
cryptocurrency exchange, on Friday. A post on its official Telegram
channel said the exchange would make temporary operational
discontinuation due to internal and external challenges. Related
Reading | Cardano Aims To Facilitate Users With Smart
Contracts Similarly, CPDAX, another smaller crypto exchange, said
it would cease operation from September 1. Aforenow, Darlbit
exchange had closed operations. This was after it suspended
withdrawals and deposit services the previous month. However, the
FSC is yet to respond to its recent plans to crash these growing
crypto exchanges. Stricter Regulatory Measures For Cryptocurrency
Exchanges in South Korea Going by the recent trend of events, there
has been stricter regulatory moves on crypto exchanges in South
Korea. The country’s financial regulators mandated the full
registration for all local crypto service platforms. The
cryptocurrency market has been flourishing for the past few days
till today | Source: Crypto Total Market Cap on TradingView.com In
addition, the authorities gave them till September to establish
non-fictitious trading accounts and recording systems. According to
the report, customers’ real-name or non-fictitious accounts are
part of the prerequisites to operate their businesses. In line with
its regulatory measures, the FSC is planning to ban cross-trading
among crypto exchanges. The agency views it as illegal trade since
it conceals the flow of transactions. Cross trading is the means
through which trading platforms buy or sell orders for an asset
without a reflection in their order book. In addition,
Cross-trading allows these cryptocurrency exchanges to earn trading
fees. Thus, its banning will make a significant negative impact on
their revenue stream. Related Reading | Tether To Conduct An
Audit To Negate Claims Concerning Transparency Both the country’s
average and minor crypto exchanges have been in a fix working by
the instruction. For them, it’s not been easy trying to get
approvals from the relevant authorities. However, the bigger shots
like Coinone, Korbit, Bithumb, and Upbit get no daunt in the
hurdle. Also, the recent regulatory measures in South Korea spread
to the larger crypto exchanges in the country. A report from Yonhap
News reveals that the Seoul Metropolitan Police Agency on Monday
called up an investigation case. The case was an alleged fraud that
connects Bithumb’s former chairman, the largest cryptocurrency
exchange in the country. Featured image from Pixabay, chart from
TradingView.com
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