Only a third of South Korean crypto exchanges have met the “minimum requirements” to register with the financial regulator ahead of next month’s deadline – with 24 already all but confirming they will close. But political pressure is mounting on the regulator, with a growing group of MPs pushing for an extension.
Exchanges have until September 24 to meet the Financial Services Commission (FSC)’s registration standards and make formal operating license applications. But thus far, only one – the market leader Upbit – has managed to do so.
With less than a month to go, a staggering 24 trading platforms have effectively thrown in the towel, the FSC’s view. A number of exchanges have already told their customers that they are closing, while international trading platforms such as Binance, a popular platform among South Korean bitcoin (BTC) and altcoin traders, have backed away from the market after hearing that they too must register or face punitive measures.
Per TVChosun, as well as Donga and Money Today, documents released by an inter-ministerial panel show that out of 63 exchanges, 21 have obtained the Information Security Management System (ISMS) certification that the regulator regards as the most basic requirement of the registration process. But 24 have not even applied for ISMS documentation. The remaining 18, the documents show, have applied for ISMS certification, but are yet to hear whether their applications have been successful.
Donga added that should this remainder fail to gain certification before September 24, they too would almost certainly be forced to close.
The FSC repeated a warning that exchanges failing to submit their documents before the deadline “will have no choice but to close or suspend” their operations.
And Money Today quoted an FSC official as claiming that customers with funds on non-ISMS certified platforms should take extra care.
The official stated that customers could “suffer damages” when these platforms closed and should “take pre-emptive measures, such as withdrawing fiat and virtual assets in advance if necessary.”
Optimists will hope for a last-gasp reprieve from parliament: A growing number of MPs from the main opposition People’s Power Party have backed a private member’s bill that would extend the deadline to March 2022.
Per News1 and Asia Kyungjae, lawmakers Yoon Chang-hyeon, Yoon Jae-ok, Yoon Ju-kyung, Sung Il-jong, Cho Myung-hee and Lee Young attended a public meeting along with senior officials and CEOs from leading crypto exchanges such as Bithumb, ProBit, Foblgate and Hanbitco.
Cho is the main architect of the bill, but the measure may not make it out of the committee stage in time to beat the deadline.
At the meeting, a ProBit executive complained that “cryptocurrency exchanges are being treated in the same manner as casinos.”
Cho stated that while “people will suffer” from the regulatory measures, the government “does nothing but impose taxes” – a reference to the fact that a 20% tax levy on crypto trading profits will come into force from next year.
Lee, meanwhile, called on the regulator to extend the deadline and use the time to “make an effort to organize and improve the industry.”
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