With less than four months left for South Korean cryptocurrency exchanges to obtain business licenses, many are struggling to comply with new regulatory requirements, the Financial Times reports. South Korea is among the most active crypto markets globally, with recent reports claiming that many of the country’s workers in their 20s and 30s are quitting their jobs to become full-time crypto traders.
Crypto exchanges have to comply with new regulations by Sept. 24.
South Korean crypto exchanges are required to introduce real-name verification systems before September 24. South Korea’s regulators have been on high alert, implementing various measures to make sure crypto users and businesses play by the rules. According to the amendment to the Act on Reporting and Use of Specific Financial Information passed by the National Assembly in March 2020, cryptocurrency trading platforms will have to comply with the Financial Action Task Force’s (FATF) guidelines to combat money laundering terrorist financing. Crypto exchanges are also required to obtain approval from the Financial Services Commission (FSC) and the Korea Internet and Security Agency to operate in the country. The deadline is set for September 24.
New rules oblige exchanges to incorporate real-name verification systems.
Most importantly, the new rules require crypto exchanges and wallet operators to incorporate real-name verification systems, which requires partnerships with approved financial institutions. However, while Korea’s major exchanges, such as Upbit, Bithumb, Korbit, and Coinone, have reportedly secured the required banking partnerships and are preparing to register with the FSC, many smaller crypto exchanges and wallet operators face problems. South Korean banks are still reluctant to do business with cryptocurrency businesses.