South Korea to shut down unregistered crypto exchanges in the country

It could be game over for crypto exchanges in South Korea this year.

Come September, all cryptocurrency exchanges in South Korea might be shut down, according to a statement by the country’s financial regulatory head.

In a policy committee meeting by the National Assembly on April 22, Eun Sung-Soo, chairman of the Financial Services Commission (FSC), said his agency has yet to receive Virtual Asset Service Provider (VASP) applications from all the exchanges in the country.

The VASP application is now being required under an amended law that’s going to be in effect this year.

A worrying declaration

According to CoinDesk, the chairman of the financial regulatory agency said, “there are an estimated 200 cryptocurrency exchanges in the country, but if the current situation continues then all of them could be shut down.”

The South Korean government initially estimated that there are just about a hundred digital currency exchanges operating in the market, but scattered reports later revealed there about 200 in operation.

On March 25, the FSC started accepting applications for the VASP, but up to this moment, no exchanges have applied yet. They have until September 24 to have their registration approved by the FSC.

The Financial Transactions Reporting Act (FTRA)

Eun’s statement has reference to the Financial Transactions Reporting Act (FTRA), South Korea’s anti-money laundering (AML) law.

It was amended last year in order to apply to crypto exchanges as well. The law requires Virtual Asset Service Providers to register with financial authorities. The FSC will then only approve exchanges that can demonstrate the strength of their AML systems.

Last April 19, it was announced that authorities would have a “special enforcement period” from April to September in order to shut down any unlicensed crypto businesses and make sure that cryptocurrency exchanges are complying with the policies of the FTRA.

 

Image courtesy of Cointelegraph News/YouTube

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