Exchanges in South Korea have a deadline to avoid being expelled from the country
The new regulatory overhaul determines rules that most of smaller companies cannot meet
A regulatory overhaul by the Financial Services Commission (FSC) is giving some South Korean exchanges a headache.
It says that the companies have until the 24th of September to register to the Commission partnering with a banking institution to not be wiped out of the country. The problem is that many of the smaller exchanges don’t have the trust of those institutions.
The banks defend that they are protecting themselves from schemes such as money laundering, considering it risky. The expectations with the new rules are to close 40 of 60 companies currently operating in South Korea according to a report by Financial Times.
And if it truly happens, another problem waits in the corner: the extinction of those smaller exchanges could lead to an estimated $2.6 billion in losses to Korean investors.
That huge loss comes from the fact that these companies list the “kimchi coins”, a group of 42 alternative cryptos used by local investors. If those exchanges disappear, it’ll directly affect the liquidity for exchanging them.
The changes in South Korea regarding crypto regulations have already been on the move since the beginning of 2021.
In March, a new legislation was made to strengthen the supervision of crypto/virtual assets.
Decisions that cut off initiatives and ban crypto’s ecosystem development inside a country are very much on the other hand of what’s being done in the modern world right now.
This regulatory overhaul can have drastic consequences for South Korean evolution in the digital assets market as well as slow down the process of revolutionary economic solutions.