Some days ago, South Korea announced new stringent regulations for crypto-related firms within the region. Although the regulation officially comes into effect by March 25, OKEx’s new move on shutting down South Korea services could be linked to the new laws. The business would stop operations within the country by April 7.
Many countries are currently taking very stringent approaches to the digital asset industry due to the sector’s continuous controversy. Governments believe that the industry facilitates terrorism funding, money laundering, and other illicit acts. This has necessitated nations to create strict laws to keep the digital asset ecosystem in line with governmental regulations.
OKEx to exit South Korea crypto space
The crypto-related firm is one of the prominent exchanges within the Asian region and has served the region for several years. Following new regulations, OKEx explained that it would no longer offer services to the region on one of its sites and that holders should transfer their digital assets before the said deadline.
The exchange explained that it would not entertain customer complaints after April 7. The firm explained that once it April 7, it will not be held responsible for the losses customers who still have their holdings on the platform incur for failing to stick to the deadline.
Despite being one of the region’s well-known exchanges, OKEx failed to reveal why it plans to end operations. Sources believe that the trading platform plans to close down operations due to the region’s government’s deadline for following new laws. The nation shared the news on March 16 and revealed that the law would come into effect by March 25.
This new regulatory framework is seen as very stringent, according to some crypto-related service providers. One of the new regulations stipulates that digital asset exchanges within the region can no longer share order books with other trading platforms.
Another important requirement, as stipulated by the nation, is that all digital asset service providers must successfully complete registration with the region’s Financial Service Commission. The deadline for this requirement is September, and platforms could face stringent penalties when they fail to follow this requirement. The punishment would be a heavy fine levied on the company for failure to follow procedures.
South Korea and heavy crypto regulations
The nation has also ordered crypto-related businesses to report suspicious transactions, keep adequate information on those transactions while keeping records for all customers using their platform. South Korean crypto holders would no longer enjoy the anonymity of transacting with virtual currencies and would have third parties accessing their information.
South Korea is currently making the region very unattractive to virtual asset service providers. It continues to make numerous regulations to keep the ecosystem free from malicious players. Some weeks ago, the country had explained that it would levy 20% on crypto profits up to KRW 2.5 million. The nation had explained that it would not tax profits below KRW 2.5 million, but sources believe that the taxed on profits not up to the said amount.