South Korean Gopax crypto exchange faces closure if unable to meet a regulatory deadline


In a
meeting of the National Assembly’s policy committee, the chair of the Financial
Services Commission (FSC), Eun Sung-soo, announced that as per a recently
amended law the platforms have to submit their requests for an official
operating license. The
regulatory deadline is approaching
and if banking difficulties don’t get resolve it will need to shut down.
All crypto exchanges need to show proof
of using real-name accounts with South Korean banks to be considered for a
license. The issue is that domestic banks have mostly declined to provide risk
assessments for the country’s numerous small-medium-sized exchanges, opting
instead to service the country’s major four trading platforms: Upbit, Bithumb,
Korbit, and Coinone. From March 25 the FSC began accepting registration
applications but no exchanges have applied yet. The deadline for all licensing
applications has been extended till September 24.
As per Eun Sung-soo “There are an estimated 200 cryptocurrency exchanges in the country.” SouthKorea’s anti-money laundering (AML) law, the Financial Transactions Reporting
Act (FTRA), which was amended last year to apply to crypto exchanges were the Law that Eun was referring
to in his announcement.
On April 19, a statement was issued by the
government’s policy that authorities will implement a “special enforcement
period” from April to September to close down any “illegitimate crypto
businesses” and will make sure that exchanges are abiding by the FTRA.
The firm
that runs Gopax is called Streami, and it was funded by Shinhan, one of South
Korea’s largest commercial banks.
The reaction
saw due to new regulations
According
to experts, the new licensing restrictions will cause up to 40 of South Korea’s
estimated 60 crypto exchange operators to shut down. The Financial Services
Commission, which oversees enforcing the new rules, has supported them saying
traders need a greater security for their funds kept on smaller cryptocurrency
exchanges. The banks are also not happy with these new regulations.
Other
government-induced regulations faced by South Korea's traders
In January
2018, during a press conference, the country’s justice minister announced about
his ministry “preparing legislation that effectively prohibits cryptocurrency
trading” and that the ministry’s goal was to “shut down all exchanges.” Park
went on to equate crypto trading with “gambling.”

Indrani bose
CBW - External Analyst
INDIA