- Majority of South Korean crypto exchanges are on the brink of being shut down this month.
- The Korean authorities recently introduced a new guide that most smaller platforms found to be daunting.
The South Korean government might not have any intention of banning cryptocurrencies in the country. However, they are concerned about the risk involved, hence, they introduced new/strict regulatory requirements for crypto exchanges and related companies aimed at checking against money laundering, and ultimately users’ protection.
However, the majority of South Korean exchanges are contending with the new requirements, and it’s estimated that close to 70 percent of crypto exchanges in the country might be forced out, given the deadline is fast approaching.
About 40 Korean crypto exchanges might be shutdown
One of the requirements in the new regulatory guide by the Financial Services Commission (FSC) was for all traders and crypto exchanges to operate using their real-name bank accounts. This was daunting for smaller exchanges, given South Korean banks won’t want to associate with crypto platforms.
The deadline for exchanges to comply with the requirements was set at September 24, and Insiders says nearly 40 out of the estimated 60 exchanges in South Korea are on the brink of getting forced out of the market. Head of Cryptocurrency Research Center at Korea University, Kim Hyoung-Joong, also asserted that the closure of these platforms will result in the fall of 42 “kimchi coins.”
South Korea may be heading for a monopolized market
Many experts have speculated that the dismissal of the majority of trading platforms in South Korea will narrow down the market to Upbit, Bithumb, Korbit, and Coinone. This could result in a monopolized market, according to them. Already, these four platforms are controlling about 90 percent of all the cryptocurrency transactions in the country, and they are not hugely affected by the new guide.