More than 65% of South Korean Crypto Exchanges to Shut Down Once FSC Deadline Hits
This could result in “huge investor losses” as users lose access to about 42 local altcoins. Currently, Polkadot (DOT), XRP, Cardano (ADA), and Cosmos (ATOM) are leading cryptos on the four top legit exchanges in the country.
The majority of the South Korean cryptocurrency exchanges are all set to be closed this month.
This will wipe out about 3 trillion won ($2.6 billion) as two-thirds of exchanges shut down, according to a report from the Finance Times.
Earlier last week, The Financial Services Commission (FSC), a financial monitoring agency in South Korea, issued a press release stating that they held an online meeting with “virtual asset service providers” (VASPs) to discuss the requirements related to the Sept. 24 deadline to register their businesses with the government.
“For VASPs that are planning to operate a virtual asset trading platform but are not planning to offer [Korean currency]-based or other fiat currency-based exchange services, the authorities advised them to terminate their fiat currency based exchange services without delay by the September 24 registration deadline.”
Those VASPs that are unable to meet the requirements and, as a result terminating their operation are advised by the authorities to “take measures to minimize damages” to their service users by informing their customers about the same with 7-day advance notice, giving them at least 30 days for withdrawal, and discard users’ personal information according to the relevant rules.
This could result in the shut down of about 40 of South Korea's 60 crypto service providers, FT reported, citing “industry insiders and regulators.”
This could also force the closure of 42 sought-after coins, which crypto exchanges are expecting to trigger a “bank run” and result in “huge investor losses.”
Upbit, Bithumb, Korbit, and Coinone are the four top exchanges in South Korea that collectively control more than 90% of the country’s total cryptocurrency trading volume.
On Upbit, the largest crypto exchanges in South Korea which won’t be affected by the regulatory tightening, currently the most popular cryptos include Cosmos (ATOM), Tezos (XTZ), XRP, Serum (SRM), Polymath (POLY), Cardano (ADA), Polkadot (DOT), and Tron (TRX).