FSC regulation overhaul is expected to close 40 crypto exchanges in South Korea-
FSC regulation overhaul is expected to close 40 crypto exchanges in South Korea-
A new regulatory revision could bring 40 out of 60 stock exchanges in South Korea out of business after the companies are expected to meet the conditions proposed by the Financial Services Commission (FSC). This campaign could also affect the owner of locally used “Kimchi” coins, which you cannot exchange for Fiat on other exchanges. This could cause losses of more than $ 2.6 billion.
South Korea exchange options drastically reduce
A regulatory revision could drastically reduce the number of stock exchanges in South Korea. According to ft is expected that this is not possible in the country, as this is not possible adhere to the new legal framework output from the financial service commission. This rule, which has a deadline for the next September 24th, stipulates that all stock exchanges must register at the institution in order to work in the country.
Many of these exchanges, however, have no way to meet the requirements for this. The law states that each crypto exchange has to work together with a back institution to open bank accounts with a real name for customers. However, banks have refused to do this in order not to be associated with money washes.
closures meet local token
This passage will also have unintentional consequences for local investors. The closure of the small exchanges that these rules cannot adhere to can bring Korean investors losses of $ 2.6 billion. This is because these stock exchanges list the so-called "Kimchi coins", a group of 42 small alternative cryptocurrencies that are only used by local investors. When these stock exchanges are closed, the liquidity for the exchange of these coins disappears.
Cho Yeon-Haeng, President of the Korea Finance Consumer Federation, said:
enormous loss of investor is expected, since the trade is exposed and assets are frozen on many small exchanges, since customer protection will probably not be the priority of the stock exchanges that are facing an upcoming closure.
International exchanges are also affected by the measure and must register with the FSC. The institution informed the stock exchanges that they have to inform users on September 17 before they close their doors. The measure will continue to centralize the cryptocurrency services in the country, whereby Upbit, Bithumb, Korbit and Coinone, the largest stock exchanges, probably from the emigration of customers to approved platforms.
What do you think of the avalanche of the stock exchange services in South Korea in the coming weeks? Tell us in the comment area below.
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