South Korea’s Crypto Exchanges Balk at Further Restrictions
South Korea’s financial regulator is set to ban local cryptocurrency exchanges from executing transactions without recording them, news agency Newsis reported on Sunday.
At a closed-door meeting last week that was attended by as many as twenty South Korean crypto exchanges, the country’s Financial Services Commission outlined a stipulation that exchanges must meet if they are to keep operating in the country.
The rule would ban cross trading—the practice of executing buy and sell orders for the same assets at the same price without recording transactions. To keep earning money from cross trading, exchanges would have to open businesses dedicated to converting crypto to fiat.
Exchanges don’t like the sound of the rule. Running these businesses would be expensive, they complained, and banning cross trading would put them out of business.
However, the FSC believes that restricting cross trading would prevent exchanges from manipulating prices, and ensure that operators don’t receive information before their clients.
Small businesses have previously complained that the licences are too expensive to obtain, and that only a handful of wealthier exchanges can afford to meet the stringent requirements of the FSC.
Either way, exchanges have until September 24 to apply for a license. If they can’t comply, they’re out.