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Many of South Korea’s 200 cryptocurrency exchanges are facing a “survival crisis” as they struggle to meet the conditions approved by the regulatory authorities. This is a major change in one of the world’s largest cryptocurrency markets.
In order to obtain a business license as a legal trading platform, the Korea Exchange must cooperate with local banks to open real-name bank accounts for customers. However, banks worry that this may make them bear the responsibility of laundering money with digital currencies.
Now that the September 24 deadline of the Financial Services Commission is imminent, only a few exchanges are expected to meet the requirements. This reflects the pressure on thousands of cryptocurrency exchanges that have emerged around the world, while global regulators are tightening policy. market.
“a lot of [global crypto] The industry is concerned about the situation of the four major regulated exchanges similar to South Korea. “An executive in the cryptocurrency market said.
South Korea’s cryptocurrency trading is dominated by four major exchanges-Upbit, Bithumb, Korbit and Coinone. They are expected to establish contacts with banks such as Shinhan, Nongghup and K-Bank to provide real-name accounts for cryptocurrency transactions and survive. Upbit and Bithumb said they are preparing to register with the FSC.
Smaller exchanges said the new regime came at the expense of the largest operator. “We are facing an existential crisis. We want to legitimize our business, but the bank is unwilling to provide us with real-name accounts,” said Foblgate head Lee Chul-ie. The country is the country’s fifth largest exchange with 100,000 Members.
“If you leave all these exchanges in the gray area for operations, more problems will arise. We may have to offshore our business.”
But some experts said that because many exchanges in the country lack measures to protect investors and transparent transactions, more regulatory controls are needed.
“There are too many trading platforms in the market, and it’s overcrowded.” Huang Se-woon, a researcher at the Capital Market Research Institute of the Republic of Korea, said that although it may cause short-term chaos, formal registration is required to clear the market.
As South Korea joins, many exchanges may close, which may curb the cryptocurrency frenzy in South Korea, one of the most active cryptocurrency markets in the world. The global suppression of digital assets, Since mid-April, its prices have been under pressure It surged earlier this year.
Facts have proved that young Koreans are enthusiastic buyers of virtual assets, which helps to promote the rise of Bitcoin prices in South Korea compared with other countries such as the United States. According to data from the data provider CryptoQuant, this premium fluctuates greatly, but it rose by more than 20% last week.
An official from a major bank said: “The new law puts us on the spot.” “Given the inherent risks involved in cryptocurrency transactions, it will be difficult for us to conclude new transactions with cryptocurrency exchanges unless the government gives clear guidelines.”
The recent warnings issued by financial institutions regarding cryptocurrency investments have exacerbated banks’ conservative policies. The governor of the Bank of Korea, Lee Ju-yeol, stated in February this year that cryptocurrencies have no “intrinsic” value.
The country’s top financial regulator, Yin Chengs, said at a parliamentary hearing last month: “My honest feeling is [investors] Do Not Enter [this market]. Cryptocurrency cannot be recognized as currency, so the government cannot protect those who invest in virtual assets. “
South Korea has a large crypto trading population, and the daily trading volume of local exchanges exceeds 20 billion U.S. dollars, which is more than three times the daily stock trading volume of retail investors in the country.
But it is still a largely unregulated market, which prompted regulators to crack down on any “illegal activities involving virtual assets” during the “special enforcement period” from April to June.
The government also plans to impose a 20% tax on capital gains generated from cryptocurrency transactions of more than 2.5 million won (US$2,200) starting next year.
Against the background of high youth unemployment and skyrocketing housing prices, these measures have not prevented young people from buying digital currency.
“The stock market is boring to me, and there is little volatility. 30-year-old tennis coach MH Chang said that even if the risk is higher, you can get rich quickly through crypto investment. Although his recent 30 million won investment in cryptocurrency has shrunk half.
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