As South Korea celebrates the passing of its first crypto-specific financial laws, many of the cryptocurrency exchanges may be at risk of going out of business.
According to news report from Yonhap, there are presently somewhere in the range of 200 crypto trades in the country, a large portion of which are little or medium-sized ventures. That number could be trimmed down to only 10 around this time one year from now.
Under the provisions of the new enactment – a correction on a current money related exchanges act – exchanges will before long need to hold fast to exacting financial guidelines. These guidelines as of now exist as rules that require all clients to utilize singular, genuine name, exchange-linked bank accounts that are ensured by standardized social security numbers.
As recently gave an account of Cryptonews.com, the nation’s “big four” exchanges (Upbit, Bithumb, Korbit and Coinone) are at present the main stages in the nation that hold fast to these guidelines, which were presented as non-necessary rules in mid 2018.
Setting up a framework like this is tedious, with banks frequently venturing to change their policies on a month to month basis. At present, trades can just sign arrangements with banks on a six-month premise, and the procedure for restoring such arrangements can be loaded and expensive – in any event, for very much upheld stages like Upbit and Bithumb.
Yonhap reports that as resistant exchanges and their administrators could be hit with fines of up to USD 41,000 or prison terms of as long as five years, numerous exchanges won’t have the option to work later on.
The news media mentioned that banks are likewise worried that they may become “overburdened” by managing crypto-exchange customers – and accordingly may try to dismiss them
Banks are also sympathetic to the specific requirements. A bank official who issued a real name account to the cryptocurrency exchange said, “It is meaningful to pass this amendment from the perspective of a bank operating an exchange account without legal basis.”
Another commercial bank official said, “If you order the bank to check and check the money laundering or internal control issues of the exchange, the issuance of a real name cannot be activated,” he said.