Local news outlets in South Korea have reported that it is expected that at least 11 crypto exchanges will be shut down in the country. According to the news sources, these exchanges are those which are mid-sized and they will be closed because of non-approval by the country’s regulator.
Financial Service Commission (FSC), which is the primary South Korean regulator, is planning to initiate crackdown operations against multiple crypto exchanges. News item suggested that the authority wants to shut down these companies over the allegations of non-licensed and fraud. It was also noted in the news that all of these soon-to-be shut-down firms are mid-sized crypto derivatives. However, none of the names of these firms have been mentioned by FSC.
It is suggested that these firms will not be given any authorizations and permissions by FSC because they are involved in illicit activities. Meanwhile, the South Korean Government has proposed that it should be implementing the regulations in a stringent way.
The news made headlines when there were several mid-sized crypto firms informed their customers of suspending their operations. They told customers that they will be temporarily unable to render services because their operations will be suspended. For instance, Bitsonic, a mid-sized exchange, told its customers at Twitter that it has to suspend its crypto service for the time being. The exchange informed that some relating to internal and external affairs are to be dealt with accordingly. Until these affairs are duly taken care of, the crypto services will remain suspended until further information.
CPDAX, which is yet another South Korean Exchange too revealed a somewhat similar situation. The firm said that till 1st September 2021, the company would not be serving any of its clients because it wouldn’t be available. In addition, another firm called “Darlbit” too has suspended crypto trading along with deposits and withdrawals.
FSC was questioned by Cointelegraph to appraise the prevailing situation. Although FSC did not give any comment initially, however, it later on advised that strict regulation is required. FSC suggested that there is huge potential in the South Korean crypto space. However, because of a handful of exchanges, the market’s reliability has been put at stake. Action will be taken in order to ensure the effectiveness and viability of the South Korean crypto market.
FSC was of the view that mid-sized firms have been requested time and again to apply for registrations. However, even though they have been reminded again and again, yet they have failed to apply for registrations. Such practices are encouraging others to evade compliance which shall not be overlooked any further.
On the other hand, mid-sized firms have been suggesting that they want to obtain licenses and registrations. However, the process is ambiguous as the regulator is not aware of how to facilitate crypto exchanges.