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11 Crypto Exchanges Shutting Down in South Korea

The Financial Services Commission (FSC), South Korea’s top financial regulator, has moved to shut down 11 local cryptocurrency exchanges over their involvement in illicit activities, The Korea Herald reported on Sunday.

Darlbit and Bitsonic are among South Korean digital asset trading platforms that recently made announcements about ceasing business operations, but the full list of exchanges that are set to go out of business remains unclear.

Upbit and Bithumb, the two largest crypto exchanges in the country, have been spared by the crackdown since they are among the very few crypto trading platforms that offer real-name bank accounts for their customers.

Real-name registration has been mandatory in South Korea since 2018 in a push to root out money laundering and other fraudulent activities.  

As reported by U.Today, banks were reluctant to extend partnerships with local cryptocurrency exchanges due to the low risk-reward ratio of such deals. Major players of the likes of Bithumb have had their partnerships extended until September.  

Hence, many smaller trading platforms found themselves backed into a corner.

The regulatory clampdown extends beyond local cryptocurrency businesses. Foreign crypto exchanges are also required to register with the Korea Financial Intelligence Unit (KFIU) by Sept. 24. Otherwise, they will have to shut up shop or potentially face criminal charges.

   

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