Comprehensive financier losses are anticipated as approximately 2 thirds of South Korean crypto exchanges have a hard time to satisfy toughened registration guidelines.
On September 6, the Korea Financial Intelligence System and the Financial Supervisory Service held a virtual conference with virtual property provider (VASPs) about their organization registration requirements.
Mass closed down
Approaching the September 24 due date for foreign and regional crypto exchanges to sign up as legal trading platforms with the authorities, practically 40 out of approximated 60 regional operators will be closed down, the Financial Times reported, pointing out “industry insiders and regulators.”
According to the report, South Korean cryptocurrency traders are dealing with $2,6 billion losses as the due date methods.
“For VASPs that are unable to meet the requirements and are terminating their operation, the authorities advised them to take measures to minimize damages to service users by issuing advance notices about their business termination at least 7 days prior (until Sep. 17) to the expected termination date, informing users about the withdrawal procedures being available until at least 30 days after terminating services and discarding users’ personal information according to the relevant rules,” checked out the authorities news release, following the September 6 virtual conference.
To be able to sign up with the authorities, South Korean operators need to partner with regional banks to open real-name checking account for clients, however, as the report explained, regional loan providers hesitated to take that path, terrified of being exposed to cash laundering and other monetary criminal activities.
“Huge investor losses are expected with trading suspended and assets frozen at many small exchanges as customer protection will not likely be the priority of those exchanges facing an imminent closure,” Cho Yeon-haeng, president of Korea Financing Customer Federation informed Financial Times
Bye-bye kimchi coins
According to Kim Hyoung-joong, head of the Cryptocurrency Proving Ground at Korea University, who clarified the most intermediate effects of the mass shutdown of smaller sized exchanges for Financial Times, the regulative overhaul might get rid of 42 altcoins, likewise described as “kimchi coins,” which are traded on regional exchanges and denominated in the Korean won.
“A situation similar to a bank run is expected near the deadline as investors can’t cash out of their holdings of ‘altcoins listed only on small exchanges,” Lee Chul-yi, head of Foblgate crypto exchange informed Financial Times
“They will find themselves suddenly poor. I wonder if regulators can handle the side-effects,” he included.
Following the United States dollar and the euro, the Korean won ranks as the 3rd most typical currency utilized for crypto trading, according to the report, which advised that the policies will likewise impact forexes that run operations for Korean traders and deal won trading.
Get an edge on the cryptoasset market
Gain access to more crypto insights and context in every post as a paid member of CryptoSlate Edge
Sign up with now for $19/month Check out all advantages
Like what you see? Subscribe for updates.
Credit: Source link