- South Korea on a Mission To Regulate Its Crypto Exchanges.
- The Korean Federation of Banks is on a mission to eliminate ‘high risks’.
- Other countries too have been tightening their crypto regulations.
As of late, countries around the world have been tightening their ropes around crypto exchanges for not complying with national regulatory measures. In a series of crackdowns, South Korea has begun this quest in doing the same.
Just recently, the UK banned its residents from trading, buying, and selling crypto on certain crypto exchanges. In detail, Binance and Kraken were the first exchanges to face this charge. Moreover, cases like this have led some exchanges to make tough decisions.
For instance, Binance announced that it will be pulling out of the Canadian province, Ontario. It said, in a notice, that all Ontario-based users must clear out all activities on the exchange by the end of this year. This was a necessary decision since the Ontario Securities Commission said Binance failed to meet its regulations.
Similarly, South Korean crypto exchanges are now under scrutiny from their financial entities. In particular, the Korean Federation of Banks has been fervently working to lower the high-risk factor that comes with the crypto industry.
Specifically, the entity has begun denying some crypto exchanges access to personal bank accounts for having ‘too many coins’ on its platform. More so, it has put on paper a ‘risk assessment guideline’. This states that exchanges hosting a high number of virtual money and having a high frequency of transactions are henceforth seen as high risk.
Another factor that led to the crackdown is that many exchanges are listing coins with ‘low credibility’. This makes for another contribution to ‘high risk’. Some exchanges have been delisting certain altcoins from their platforms in order to conform to the regulations.
The next factor for tension came from the recent ‘Act on Reporting and Using Specified Financial Transaction Information’ amendment. This change says exchanges must find banks that are willing to partner with them for issuing accounts.
In turn, this places a responsibility on the banks to evaluate the risk and transparency behind these exchanges. So far, most exchanges have not found a partner bank. Thus, most of them are facing the risk of having to shut down.