29 crypto exchanges survive new regulation in South Korea, 37 exchanges have to close – regulation

The deadline for crypto exchanges and service providers in South Korea to meet the requirements to remain open under the new regulation has passed. Twenty-nine cryptocurrency exchanges have met the deadline to continue operations, but only four of them can offer trading in Korean won.

New South Korean crypto regulation in force

The Law on Reporting and Use of Specified Financial Transaction Information requires crypto exchanges to obtain an Information Security Management System (ISMS) certification and submit a report to the country's Financial Intelligence Unit (FIU) by midnight on September 24. Won Korea must also partner with a local bank to provide users with real-name accounts to offer.

The Financial Services Commission (FSC), South Korea's top financial regulator, said on Saturday that 29 crypto exchanges are ISMS certified and submitted a report to the FIU ahead of the deadline. Your submissions will be processed within three months.

Only four out of 29 exchanges – Upbit, Bithumb, Coinone and Korbit – have successfully partnered with banks to offer real-name accounts to their users. A banking partnership is required for exchanges to offer traders the ability to buy and sell cryptocurrencies in exchange for Korean won. The remaining 25 exchanges may only operate as pure crypto exchanges.

The 29 crypto exchanges are now required to establish a system of adopting global anti-money laundering standards called the Travel Rule, as recommended by the Financial Action Task Force (FATF), an intergovernmental anti-money laundering watchdog.

Bithumb, Coinone and Korbit are developing a joint system to comply with the travel rule, while Upbit, the largest exchange in South Korea, is working on its own system.

After the Friday deadline, 37 small crypto exchanges have failed to meet regulatory requirements and will have to close their operations. Exchanges that fail to do so face a fine of up to 50 million won ($42,365) or up to five years in prison.

What do you think about the fact that 29 crypto exchanges meet regulatory requirements in South Korea, but only four can trade in Korean won? Let us know in the comments section below.

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