Looming Shutdown of Crypto Exchanges in South Korea

The chairperson of the Financial Services Commission in South Korea has stated that the country may shut down all crypto exchanges. The country has around 200 crypto exchanges that may be affected by the closure.

The top financial regulator in South Korea has announced that the country may shut down all crypto exchanges by the fall. This development comes after news that the firms are yet to comply with the new regulatory laws introduced in the country.

The chair of the Financial Services Commission, Eun Sung-soo, announced this possibility on April 22 to a National Assembly policy committee. In his remarks, Sung-soo stated that the regulator had not received any applications for compliance from any Virtual Assets Service Providers (VASPs) in the country.

South Korea tightening the noose on crypto

South Korea introduced new regulatory laws aimed at increasing regulations in the crypto market. The country’s financial regulators recently added companies in the crypto market to comply with the anti-money laundering law (AML). The Financial Service Commission was supposed to start receiving applications for compliance from March 25, but none of the exchanges has applied.

The AML law is expected to go into effect by the end of the year. However, Sung-soo informed the committee that none of the 200 exchanges in the country had shown interest in compliance. If this continues, the chair notes that it could lead to a shutdown of all crypto exchanges in the country.

Under the new, crypto exchanges need to have an official partnership with a bank in the country. Sung-soo noted that only four exchanges have this type of partnership. However, even these four exchanges are yet to apply for the VASP. Traders, however, believe that the four are the only ones expected to survive the new market regulations.

Increased regulations in the crypto market

The public’s interest in crypto has peaked, and regulators are looking into ways to control the growing industry. South Korea is not the only country to introduce strict AML laws. The European Union is also looking into implementing the 5AMLD law to curb crypto’s use for money laundering and terrorism financing.

However, the crypto community is anxious about the new regulations, with some people arguing that they will suppress the anonymity associated with cryptocurrencies. However, firms that fail to comply may be forced out of the market. After South Korea introduced new strict rules on crypto, major exchanges exited the market.