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All 200 Cryptocurrency Exchanges Could Be Shut Down Under New Regulation in South Korea, Regulator Warns

The chairman of South Korea’s leading monetary regulator, the Financial Services Commission (FSC), Eun Sung-soo, has actually alerted that all of the cryptocurrency exchanges in the nation could be closed down. South Korea presently has about 200 cryptocurrency exchanges, he stated.

All Crypto Exchanges Could Be Shut Down in South Korea

At the basic conference of the National Assembly’s Political Affairs Committee recently, The Korea Times estimated Chairman Eun as stating:

All of the country’s 200 cryptocurrency exchanges could be closed down after September as soon as an unique monetary law works.

Chairman Eun discussed that cryptocurrency exchanges are needed to be signed up with the FSC under the modified Special Funds Act (Act on Reporting and Using Specified Financial Transaction Information). “We are now accepting applications for them to formally register their company by the timeline, however no exchange operators have actually used to date,” he exposed. Since no business have actually been signed up, he alerted that “They could be closed down all of a sudden in September.”

The modified costs of the Special Funds Act entered into impact on March 25 and its arrangements will be implemented on Sept. 24 after a six-month grace duration. The change needs cryptocurrency companies, consisting of crypto exchanges, to fulfill requirements such as getting Information Security Management System (ISMS) accreditation and issuance of real-name accounts.

The Financial Services Commission is accountable for signing up cryptocurrency exchanges that fulfill these requirements. However, numerous crypto exchanges are worried that they might not have the ability to fulfill the requirements, especially concerning real-name accounts, which might result in a mass shutdown of exchanges.

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Chairman Eun kept in mind that cryptocurrencies are not currencies, stressing that the federal government has actually consistently warned financiers that their “unexpected rate changes threaten.”

Furthermore, the FSC chairman stated that benefit from cryptocurrency financial investments will be taxable beginning next year. The Ministry of Strategy and Finance revealed in February that from 2022 earnings produced cryptocurrency deals will be categorized as other earnings and will be taxed independently at a tax rate of 20%.

Last week, the tax department of the Seoul urban federal government took cryptocurrencies worth about $25 million from numerous crypto financiers with overdue taxes.

What do you think of the caution by the FSC chairman? Let us understand in the comments area below.

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