South Korea: Regulators turn a deaf ear to crypto-exchanges’ woes

South Korea: Regulators turn a deaf ear to crypto-exchanges’ woes

News
August 21, 2021 by J.D. Smith
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In a bid to regulate the cryptocurrency industry, South Korean regulators had given cryptocurrency exchanges time till 24th September to register with the authorities to continue to function, however, the exchanges found this deadline too short. Ergo, the country’s blockchain organizations urged the regulators to push this deadline by six months. However, it may have
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In a bid to regulate the cryptocurrency industry, South Korean regulators had given cryptocurrency exchanges time till 24th September to register with the authorities to continue to function, however, the exchanges found this deadline too short. Ergo, the country’s blockchain organizations urged the regulators to push this deadline by six months. However, it may have gone unheard.

The existing regulations in South Korea made it difficult for small crypto exchanges to acquire required paperwork and to obtain Information Security Management System [ISMS] certification. The same found mention in a joint regulatory audit that was carried out this week. It was noted that out of 33 leading crypto exchanges, neither had banking contracts in place, nor did they put in place any anti-money laundering protocols. Moreover, while management and security issues also remained unresolved.

Lawmaker Cho Myung-hee of the Korea Fintech Association and People Power Party, held a forum earlier today, wherein participants discussed the extension of the deadline for abovementioned reasons. According to reports, Representative (Rep.) Cho Myeong-hee and Rep. Chang-Hyun Yoon of the People Power Party, have already proposed related bills that include extending the reporting deadline and introducing a specialized banking system that will be responsible for issuing real-name accounts on exchanges.

Do Hyun-soo, chairman of the virtual asset business association of the Korea Blockchain Business Promotion Association [CEO of Probit] noted in this regard,

“It is physically impossible to issue a real-name account until September 24.”

While Kim Hyung-Joong, a professor at Korea University added that if the regulators did not show flexibility in extending the deadline, it may lead to the closure of many exchanges. However, authorities did not back their positions as the head of the Financial Policy Division at the Office of Government Policy Coordination, Kwon Min-young noted,

“It is difficult to overlook the concern that consumer damage will increase if businesses that do not meet the legal requirements extend their business.”

While exchanges were still dealing with unsupportive banking partners, the Financial Services Commission noted that if the exchanges were unable to comply with the Special Provision Act that was passed nearly one year and four months ago, “giving an additional six months will not change anything.”

Looks like the exchanges in the country were left to fend for themselves at this point, but the Blockchain association may not back down and continue to fight at least till the current deadline approaches.