Insiders claim that the majority of Korean crypto exchanges will shut down in this month

Failure to comply with South Korean regulators’ new requirements could result in the closure of tens or more crypto exchange operators.
The deadline for South Korean cryptocurrency exchanges to comply with new compliance requirements is fast approaching. All operators are expected to submit requests to the Financial Services Commission (FSC), no later than September 24th. Representatives for smaller exchanges and industry actors have been challenging the new requirements for a lot of the past year, but without success. Insiders now expect that 40 of the country’s 60 crypto operators will have to close down. FSC argued that customers are demanding more protection for assets stored on smaller crypto platforms. The FSC has argued that South Korea’s banks are not required to conduct risk assessments for applicants exchanges. This is except for the top four trading platforms. These four exchanges, Upbit, Bithumb and Coinone, already account for more than 90% of South Korea’s total traded volume. Experts have made the case that the FSC will further cement South Korea’s crypto market as a monopolized space. Furthermore, Kim Hyoung-joong, a professor at Korea University and head of the Cryptocurrency Research Center, predicts that 42 “kimchi coin” exchanges will be closed. This moniker is used to describe smaller altcoins that trade against the Korean won. Lee Chul-yi is the head of Foblgate’s local crypto exchange. He told the Financial Times that investors won’t be able to cash out their small-listed ‘alt-coins. […] They’ll suddenly become poor. I wonder if regulators can handle the side-effects.”Related: Regulations drive Korean exchanges to delist, warn against high risk coinsWith altcoins estimated to account for 90% of traded volume in South Korea’s crypto markets, the FSC has reportedly advised those exchange operators who expect to shut down to notify their clients no later than Sept. 17. President of Korea Finance Consumer Federation Cho Yeon-haeng claimed that customer protection is unlikely in an environment where exchanges are facing imminent closure. He also stated that large investor losses will be expected from the suspension of trading and freezing of assets on smaller platforms. Binance has already stopped trading in Korean won pairs this summer to prevent it from fouling Korean authorities. This is because there are concerns that crypto traders, particularly younger ones, may be borrowing too much to trade, as they struggle to cope with rising real-estate prices, suppressed wages, and a stagnant job market.

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