Ahead of the September 25 deadline for South Korean cryptocurrency exchanges to meet requirements of the country’s crypto regulations, 28 exchanges have reportedly been cleared to continue their business. Notably however, just four crypto exchanges have met the requirements that allow trading in Korean won (KRW).
South Korea’s amended Act on Reporting and Using Specified Financial Transaction Information requires cryptocurrency exchanges to get their Information Security Management System (ISMS) certification by Sept. 24 and report to the Financial Intelligence Unit (FIU), a division of the Financial Services Commission (FSC). Those that fail to do so will be ordered by the financial authorities to cease their business.
A list of 28 cryptocurrency exchanges that have met the requirements to stay open after September 24 was released. Among those that have been ISMS-certified are Gopax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax, and Okbit.
Commenting on this list, Jeon Yo-Seop, head of FIU’s Planning and Coordination Office, said he believes the list to be conclusive:
“It is unlikely that there will be additional certified virtual asset trading platforms.”
Nevertheless, to be able to offer trading in Korean won, exchanges will have to partner with banks to offer customers real-name verification deposit/withdrawal accounts. Banks in the country have been reluctant to partner with crypto exchanged due to perceived risks. So far, the only ones that have been able to comply with this requirement and can therefore offer trading in won are the top exchanges, Upbit, Bithumb, Coinone, and Korbit.
The remaining 24 exchanges that have not partnered up with a bank, must end trading in the KRW market even when ISMS certified. It could mean the end of their business. Overall it is expected that between 40 and 60 exchanges in South Korea will have to close shop by next week.
Financial authorities in South Korea have also issued additional guidelines that are intended to protect customers, such as relating to account closures and retrieval of funds.