Over thirty percent of digital currency exchanges in South Korea are expected to cease existing as indications have emerged that they can’t meet the me compliance requirements in the country. South Korea’s Financial Services Commission (FSC) revealed this in a press release on Wednesday.
Recall that in an act enforced earlier this year on March. 25, the FSC gave exchanges until Sept. 24 to prepare and submit a report to the Financial Intelligence Unit (FIU) to continue operating in South Korea.
However, according to the statements, some exchanges look set to be on the path to miss the first requirement mandated by the new crypto exchange regulations, which is to obtain the Information System Management System (ISMS) certification. Having the ISMS certification approved by Korea Internet &Security Agency (KISA) means an exchange has successfully constructed a system in safeguarding its usersinformation.
The statement indicated that 24 out of 63 digital currency exchanges in the country fall under this list. Aside the 24 exchanges, 18 others have made an application that are under review. Another group of 21 exchanges out of 63 have already obtained the certification.
Significantly, the press release indicated that some of the exchanges that have competed the application may be declined by the KISA, an outcome that would force them to also close down after the Sept. 24 deadline.
A further breakdown of the statement indicated that majority of the 24 exchanges that have not applied for the ISMS certifications are more obscure and small-sized businesses. In fact, some of these exchanges are already announcing their suspension of services on their website.
This however does not take away the fact that the list included the names of more prominent ones that are foremost within the Korean crypto space. Some in this category includes the Korean division of Singapores DigiFinex is also on the list.
However against the backdrop of the move, top industry officials have began speaking against the regulatory agency more loudly.
During a virtual meeting organised by the Virtual Asset Special Committee of the Peoples Power Party, some exchange representatives and top lawmakers present showed dissatisfaction for the impending deadline.
“Force closing the exchanges will leave many virtual asset investors in chaos. The deadline for the reporting should be extended six months, in which more guidelines and lawmaking should be placed,” Lim Yo-song, the CEO of COREDAX said.