Korea loses 37 crypto exchanges, but market impact minimum at 0.1% share

[Photo by Han Joo-hyung]

A total of 37 cryptocurrency exchanges in South Korea have gone out of business after failing to meet toughened rules by Friday deadline, but the impact would be minimum as their market share makes up less than 0.1 percent.

According to Financial Intelligence Unit (FIU) under Financial Services Commission (FSC) on Sunday, a total 42 cryptocurrency exchanges have filed registration applications with the financial authority before new regulations took off Saturday.

As result, 37 cryptocurrency exchanges would cease to exist for failing to apply for Information Security Management System (ISMS) certification or earned a certificate. Of them, 14 crypto exchanges filed for ISMS certification but were rejected.

Their won-denominated deposit balance was 4.18 billion won ($3.5 million) as of Tuesday, significantly less than over 260 billion won in April. All 23 crypto exchanges that did not file for ISMS certification filed for business closure instead.

Won-backed coin trade will be possible at four major exchanges – Upbit, Bithumb, Coinone, and Korbit – and business as usual as they have earned security certificates and real-name bank accounts.

Twenty-five exchanges – including Gopax and GDAC – that were not able to obtain real-name bank accounts registered can trade coin but not in the local won assets for failing to find bank partners.

The FSC will be closely watching crypto exchanges that failed to meet new conditions. It plans to clamp down on illegal activities such as won-denominated market or coin market operations without registration and if found, immediately report to the investigation authority, said an unnamed FSC official. It will also make sure exchanges that went out of business return deposits and virtual assets to investors.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]