Minor Cryptocurrency Exchanges Likely to be Forced Out

Only four cryptocurrency exchanges (UPbit, Bithumb, Coinone and Korbit) are expected to be able to survive the ongoing restructuring led by the South Korean government.

This is because Financial Services Commission Chairman Eun Sung-soo clarified on July 1 that banks will remain responsible for cryptocurrency exchange screening and banks, in response, are refusing to expand their partnerships with cryptocurrency exchanges. According to those banks, they must be responsible for future financial accidents related to money laundering with the government doing nothing and this inaction is improper and inappropriate.

According to the Act on Reporting and Use of Certain Financial Transaction Information, every cryptocurrency exchange in South Korea must complete its business registration by Sep. 24 by obtaining a real-name account from a bank and the Information Security Management System certificate from the Korea Internet & Security Agency. At present, only the four major exchanges satisfy both and 16 are without the account.

Shinhan Bank recently decided to keep doing business with Korbit. NH Bank is planning to do so with Bithumb and Coinone. KB Kookmin, Hana and Woori Banks announced that they would keep away from cryptocurrency exchanges. In the meantime, the four major exchanges are planning to set up a joint firm to respond to travel rule implementation.