A new regulatory overhaul in South Korea could force 40 out of 60 exchanges, as firms are projected to fail to meet new standards.
A new regulatory revamp in South Korea could force the closure of 40 out of 60 exchanges since the firms are projected to fail to meet the Financial Services Commission‘s suggested standards (FSC). Holders of locally used “kimchi” coins who won’t trade them for fiat in other exchanges may be affected by the regulatory revamp. This might result in losses of almost $2.6 billion.
In South Korea, 40 cryptocurrency exchanges are set to close.
According to a story in the Financial Times, 40 of the country’s 60 exchanges are anticipated to close due to their failure to comply with the Financial Services Commission‘s new regulatory framework. This rule, which has a September 24 deadline, requires all exchanges to register with the institution to function in the country. However, many of these exchanges are unable to meet the requirements. In addition, according to the law, every crypto exchange must also work with a banking institution to open real-name bank accounts for customers.
The regulatory change will impact local investors.
South Korea’s regulatory overhaul will have unanticipated effects on domestic investors. Closing small exchanges that fail to comply with these laws might cost Korean investors $2.6 billion. These exchanges support the so-called “kimchi coins,” a collection of 42 small alternative cryptocurrencies that local investors only use. Liquidity for swapping these coins will vanish if these exchanges close. The measure also applies to international crypto exchanges, which must register with the FSC.