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A financial regulation from South Korea has set a new deadline for exchanges in the country to register as legitimate trading platforms. Now local exchanges are struggling to meet the conditions set by the regulators. The country’s crypto traders, KIMCHI. Finance (KIMCHI) will be prepared for losses exceeding $2.6 billion. Kim Hyoung-Joong, a professor and head of cryptocurrency research at Korea University, says 42 altcoin projects could perish. Here are the details…

Nearly two-thirds of altcoin exchanges expected to be shut down

South Korea’s Financial Services Commission (FSC) has set a deadline for overseas and local crypto exchanges to register as legitimate trading platforms. While the country aims to tighten the regulations on the crypto money sector, approximately two-thirds of all exchanges are expected to be closed. About $2.6 billion in cryptocurrencies could disappear when South Korea’s crypto exchange hits its deadline for registration September 24.

$2.6 billion crypto will be destroyed

South Korea’s financial regulator has set a deadline for foreign and local crypto exchanges to register as legitimate trading platforms by the end of September. However, most local exchanges struggle to meet the conditions set by the regulator. This could result in the shutdown of around 40 crypto exchanges by September 24.

Currently, Upbit, Bithumb, Korbit and Coinone are the four major exchanges dominating the country’s crypto trading industry. These platforms account for more than 90% of the country’s total cryptocurrency trading volume.

According to Hyoung-Joong, about 42 altcoin projects may cease operations

According to Kim Hyoung-Joong, professor and head of cryptocurrency research at Korea University, smaller exchanges could potentially be shut down and KIMCHI. In finance (KIMCHI), it can end the transactions of about 42 altcoins. These are altcoin projects that are listed on local crypto exchanges and are mostly traded in the country’s local currency, the Korean won. For crypto exchanges to qualify as a legit trading platform, firms must work with local banks to open accounts in customers’ real names. Local banks are hesitant to do so due to fears of exposure to illegal activities, including money laundering.

Cryptocoin. com, so far, around 20 exchanges have met certain conditions set by the financial watchdog by enabling their personal information collection systems to allow crypto trading on the platforms. However, those in the industry believe these operators will still struggle to survive in the industry, given the limited size of their businesses.

Fine or jail time may apply if exchanges breach

Cho Yeon-haeng, head of the Korea Finance Consumer Federation, said that large investor losses are expected if trading is suspended. At the same time, a variety of cryptocurrencies will be frozen on small exchanges. If crypto exchanges fail to meet the new requirements before the deadline, the FSC has advised crypto exchanges to notify their clients of the possible shutdown before September 17. If any cryptocurrency service provider continues to operate in the country without proper registration, responsible parties will face up to five years in prison or a fine of up to approximately $43,500.

Bitfront is reportedly limiting its servicedollar series in South Korea

LINE could potentially be one of the first of many foreign cryptocurrency exchanges in the country to decide to stop or limit their service. The South Korean government is constantly cracking down on cryptocurrency exchanges, with sweeping restrictions on cross-border remittances involving cryptocurrencies to prevent money laundering. This came after many reports of a suspicious increase in bank transactions from South Korea to China. FSC believes this is due to the emergence of Kimchi Premium seen earlier this year, which prompted some Chinese investors to seek cross-border arbitrage opportunities.


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Michael Lewis

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