South Korean cryptocurrency exchanges must register with the country’s Financial Intelligence Unit by next Friday (Sept. 24), meaning that dozens of exchanges must notify their customers on Friday (Sept. 17) of their plans to either partially or completely shut down if they can’t comply with the new regulations.
In addition to registering with the FIU, South Korean crypto exchanges must also provide a security certificate from the internet security agency and partner with banks to ensure that all accounts on their platforms use real names. The exchanges that register but don’t have bank partnerships can’t trade in won until they comply with the new rules.
“Should some or all services need to be closed, (exchanges) should notify customers of the expected closing date and procedures to withdraw money by at least seven days before the closure,” the Financial Services Commission said earlier this week, urging the notice to come no later than today.
About 40 of South Korea’s crypto exchanges will opt for a full shutdown, according to Reuters. Another 28 are expected to have their security certificates by the deadline but haven’t locked down bank partnerships, according to the report.
Four of the country’s exchanges — Upbit, Bithumb, Coinone and Korbit — have registered with FIU and have bank partnerships, meaning they can offer won as an option on their platforms. ProBit, Cashierest and Flybit previously said they will not offer won on their exchanges until they land bank partnerships.
Related: S. Korean Crypto Traders Expect New Market Rules to Cause $2.6B in Losses
The new rules imposed on cryptocurrency exchanges by South Korea’s Financial Services Commission regulatory agency could cost traders $2.6 billion or more, according to a recent report in the Financial Times.
The Korean won is third to the U.S. dollar and the euro in a ranking of currencies used for crypto trading, according to the report.
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