Source: AdobeStock / mehaniq41
Only a third of South Korean crypto exchanges have met the “minimum requirements” to register with the financial regulator before the next month’s deadline – 24 have already almost confirmed they will be closed. But political pressure on the regulator is growing and a growing group of MPs is pushing for an extension.
Exchanges have until September 24th to meet Financial Services Commission (FSC) registration standards and submit formal applications for operating licenses. But so far only one has succeeded – the market leader Upbit.
In less than a month, an incredible 24 trading platforms have effectively thrown in the towel, according to the FSC. A number of exchanges have already told their customers that they are closing, while international trading platforms like Binance, a popular platform among South Korean Bitcoin (BTC) and altcoin traders, pulled out of the market after hearing that they too register or expect penalties.
According to TVChosun, as well as Donga and Money Today, documents released by an inter-ministerial body show that out of 63 exchanges, 21 have received Information Security Management System (ISMS) certification, which the regulator considers to be the most basic requirement for the registration process. But 24 haven’t even applied for ISMS documentation. The remaining 18, as the documents show, have applied for ISMS certification but have yet to hear if their applications were successful.
Donga added that if the remainder fail to receive certification before September 24th, they will almost certainly be forced to close as well.
The FSC reiterated a warning that exchanges that fail to submit their documents before the deadline “have no choice but to close or suspend their operations”.
And Money Today quoted an FSC official as saying that customers with funds on non-ISMS certified platforms should be extra careful.
The official said that if these platforms were to close, customers could “suffer harm” and “should take preventive measures such as closing down these platforms.
Optimists are hoping for one last breath of parliament: a growing number of MPs from the largest opposition party, the People’s Power Party, have supported a 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 along with senior officials and CEOs from leading crypto exchanges like Bithumb, ProBit , Foblgate and Hanbitco.
Cho is the main architect of the bill, but the measure may not get out of the committee stage in time to meet the deadline.
At the meeting, a ProBit manager complained that “cryptocurrency exchanges are treated like casinos”.
Cho stated that while “people will suffer from the regulatory measures,” the government is “only collecting taxes” – an indication of the fact that a 20% tax on profits from crypto trading will come into effect from next year .
Lee, meanwhile, urged the regulator to extend the deadline and use the time to “strive to organize and improve the industry.”
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