The deadline for cryptocurrency exchanges and wallet operators to comply with the new regulatory requirements to stay open in South Korea is this week. So far, only one crypto exchange has been licensed to continue operations -Dunamu Inc., the operator of Upbit and the largest crypto exchange in the country. About 60 crypto exchanges are expected to either shut down or reduce services.
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All crypto exchanges must be certified with Information Security Management System (ISMS) and register with the South Korean Financial Intelligence Unit (FIU) Under the “Act on the Reporting and Use of Specific Financial Transaction Information (Special Act),” with a deadline of Sept. 24.
Meanwhile 34 exchanges have not received ISMS certification according to local media
and they are expected to shut down entirely on Sept. 24.
A total of 29 crypto exchanges have been ISMS-certified but only one has successfully registered with the FIU, a unit of the Financial Services Commission (FSC), the country’s top financial regulator.Source
The FIU further revealed on Friday that besides Upbit, four other crypto exchange operators have submitted a report: Bithumb, Korbit, Coinone, and Korea Digital Exchange (Flybit). In addition, a wallet operator, Korea Digital Asset (KODA), has also submitted a report.
The FSC said:
Considering that there is less than a week left until the 24th, virtual asset providers who have not yet filed a report should file a report promptly.
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However, only the country's largest exchanges — Upbit, Bithumb, Coinone, and Korbit — can offer trading in Korean won.
Registered crypto exchanges that want to offer trading in Korean won must also partner with banks to provide users with real-name verified accounts but currently banks are reluctant to partner with smaller exchanges due to risks such as money laundering.
To this effect, crypto exchanges in this category are expected to have already notified their customers as required by the financial regulators. Four companies — Gopax, Gdac, Hanbitco, and Huobi Korea — said they are still working to secure banking partnerships by the deadline.
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