Tuesday, June 18, 2019
Korean Government Lenient Only with Foreign Cryptocurrency Exchanges
Lack of Regulations Attracting Foreign Crypto Exchanges
Korean Government Lenient Only with Foreign Cryptocurrency Exchanges
  • By Yoon Young-sil
  • June 13, 2019, 11:11
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An increasing number of foreign cryptocurrency exchanges are entering the South Korean market amid lack of regulations related to cryptocurrency exchange establishment.

An increasing number of foreign cryptocurrency exchanges are entering the South Korean market, attracted by its particularly high cryptocurrency trading volume-to-population ratio and lack of regulations related to cryptocurrency exchange establishment.

On the other hand, South Korean cryptocurrency exchanges are having a hard time penetrating overseas markets. This is because the South Korean government is blocking their overseas transmittance out of concerns over money laundering.

OKEx Korea, which launched a beta service in South Korea last year, is planning to launch its full service on June 18 to provide won-based Bitcoin, Ethereum and Tether trading. Digifinex is going to open its exchange and launch its service in South Korea within this month as well. Digifinex Korea has received membership applications since June 10. BW.com is considering opening an exchange in South Korea, too.

As mentioned above, South Korea still has no regulations related to cryptocurrency exchange establishment unlike the United States, Japan and Southeast Asian countries. The foreign cryptocurrency exchanges are going to use their own accounts instead of those provided by local banks in South Korea, which is riskier in terms of hacking, money laundering, and the like.

In the meantime, it is not easy for South Korean cryptocurrency exchanges to expand their business abroad. Even if they succeed in establishing their branches abroad by meeting different requirements, they cannot send money for local marketing and branch operation since the remittance is currently prohibited by the government.