South Korean Crypto industry regulators are seeking client’s data from the nation’s bank. That is with an attempt to detect all crypto exchanges working within the region. On Thursday, The Korean Herald reported that various fiscal regulators are summoning financial institutions. It is for no reason other than to provide information concerning their businesses with online crypto exchanges.
In the last few months, different governments have launched crackdowns aimed to expose unregulated cryptocurrency platforms. Most of these jurisdictions want to prevent crimes in this business space that is brimming at the moment. Keep in mind that scammers are also on the look to have a share of the fortunes.
The Korean regulators want to understand the procedures by banks to monitor credible cryptocurrency exchanges. How do you think that move by the regulatory bodies will benefit crypto investors? Will online trading be more secure? Also, the financial authorities want to access corporate account details for customer security
South Korea took the step to ensure strict regulations for the thriving cryptocurrency industry. Under these new regulations, all crypto exchanges based in South Korea must maintain legit banking accounts under each client’s name.
Although reputable cryptocurrency exchanges in this country, Korbit, Coinone, UpBit, and Bithumb have bank support, smaller platforms find it hard to get banking partners.
According to a report from the local media, an unknown official stated that at the moment, some crypto platforms are operating illegally, making it challenging to detect the number of exchanges in the market.
The best way regulators can track cryptocurrency exchanges operating in Korea is through bank accounts collecting client’s funds. That is why financial regulators decided to take that move.
Can Small Brokers Survive?
South Korean executives assessed about 100 to 200 smaller crypto platforms operating without authorization within the country. Financial regulators are planning to sanction these platforms after retrieving information from banks. Crypto exchanges operating without banking support will have up to September end.
Moreover, Korean exchanges will have to provide regular reports about their operation to specific regulatory bodies. Failure to observe this will attract a penalty of a jail term (up to 5 years) or a cash fine amounting to 50m won (approximately $44,000).
Meanwhile, several crypto exchanges are leaving the business space after finding it hard to adhere to the new laws.