Crypto-facing company OKEx announced on Tuesday that it would be shutting down its operations in South Korea come April 7.
The notice posted on the crypto exchange’s subsidiary website said users should clear their accounts before the deadline. After April 7, the company will no longer attend to complaints.
“After the end of the service, OKEx Korea will not be held liable for any losses arising from failure to withdraw by customers,” the company stated.
The exchange did not state reasons for its decision to close its Korean operations, but there are growing indications that the new crypto law introduced on March 16 might have played a part.
The law comes into effect on March 25 and it comes with a set of revised provisions for crypto firms. First agenda is that crypto exchanges operating in the country will no longer be permitted to share their order books with other exchanges.
The second requirement is that virtual assets service providers (VASPs), crypto exchanges inclusive, must complete registration with South Korea’s Financial Services Commission before September or face penalties. Penalties could range from 30% to 60% of the maximum amount approved by the agency.
These revised laws mandate crypto exchanges to report all illicit transactions, keep relevant data on such transactions, and must maintain separate records of individual customer’s activities on their platforms.
Business Difficulties Play A Part
The South Korean crypto narrative has been fraught with a lot of frustrating laws. Last month, the Korean government announced that it would be collecting a 20% tax on crypto gains up to KRW 2.5 million (about $2,260).
Although the government has since said the first 2.5 million won is non-taxable, crypto exchanges have seen business nose-dive.
In a spill-all interview with crypto news platform The Block, an OKEx Korea official admitted the company was experiencing business difficulties aside from regulatory issues with the Korean government.
“We struggled to get ISMS (Information Security Management System) certificate and virtual account (bank account required to get licensed),” said the official. “As a joint venture with OKEx.com, it was hard to decide, but we had no other option.”
According to data sourced from crypto platform CoinGecko, the crypto exchange recorded a paltry $1.3 million in trading volume in the last 24hr.
OKEx joins fellow crypto exchange Binance Korea in leaving the Asian nation. The subsidiary of the largest cryptocurrency by trading volume also announced a departure from the Korean market following business difficulties.