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Korean minister says all 200 crypto exchanges in the country face a risk of closing down

The statements come on the back of increased calls for crypto regulation in the country.

Korean minister says all 200 crypto exchanges in the country face a risk of closing down

Cover art/illustration via CryptoSlate

Eun Seong-soo, chairman of the Finance Committee in South Korea, said this morning that over 200 cryptocurrency exchanges at the risk of being closed down in September this year if they fail to follow the relevant regulations, as per a report on leading local outlet Chosun.

He added officials were further planning to impose taxes on cryptocurrency trading and that the government had โ€œno plans to protectโ€ crypto investors.

Regulations for Korea

Earlier this year, South Korea introduced new laws for crypto businesses and traders in the country, introducing stricter regulations, new KYC policies, a different tax scheme, and requiring all crypto businesses to register in the country.

The revised bill of the Special Money Act came into effect on March 25 and takes effect from September 24 after a six-month grace period. The amendment requires crypto businesses to meet requirements such as information protection management system (ISMS) certification and issuance of real-name accounts.ย 

But as per Eun, no crypto exchange has registered with the government under the Special Money Act, to which he said:

โ€œThere are 200 virtual currency exchanges, but they could all be closed. They could be closed suddenly in September.”

The stern comments did not end there. Eun said that while equity and traditional markets โ€˜protectโ€™ investors, the crypto market doesnโ€™t and is even compared to โ€œbuying and selling pictures.โ€

“I don’t think that the people should protect (investors) because the people are investing and interested in a lot of money. If you go the wrong way, it is the wrong way,โ€ he stated.

Booming crypto market

Eunโ€™s comments come amidst a booming crypto market in Korea and increased trading volumes. As CryptoSlate reported last month, some days saw crypto trading volumes exceed those of the countryโ€™s stock market trading volumesโ€”in what was the first-such instances anywhere in the world.

As per analytics tool CoinGecko, the three largest Korean crypto exchanges traded nearly $20 billion in the past day alone, with other top exchanges seeing volumes above $100 million.

Meanwhile, while Eunโ€™s statements spell doom for local exchanges in South Korea, local industry experts say it could be more of a warning than an outright judgment.ย 

โ€œIt’s an understandable statement as there has been an uptick in various issues. But I take it more as a warning,โ€ shared Doo Wan Nam, the Seoul-based business development head of MakerDAO in Asia. Korean traders are likely hoping the same.

Updated on 23 Apr: Fixed a Google translation misquote from the Korean minister.

Posted In: , Regulation, Trading