The wave of intensifying scrutiny for cryptocurrency exchanges in South Korea is spreading to exchange tokens as well.
The South Korean “Coin Clean-up” operation is looking to hold down exchanges within the country from handling their exchange-based tokens. The authorities have threatened strict legal sanctions to businesses that would default the regulation.
Arirang reported that exchanges in South Korea won’t be permitted to handle any cryptocurrency asset issued by themselves. The law extends to their relatives including spouses, distant relatives, or friends.
The regulation is slated to take effect from June 26 and exchanges that fail to comply would face a fine of $88,000 as well as suspension.
The Financial Intelligence Unit (FIU) in South Korea earlier reached out to about 33 exchanges in the country to participate in a field consultation. The event was expected to hold on the 24 of September.
However, Upbit a crypto exchange in the country delisted several assets on its platform and developed strict warnings for about 25 assets on the platform.
The 25 digital assets that Upbit warns against makeup 14 percent of assets still under the platform. The exchange has also declined inbound deposits on those assets as it deliberates on delisting them completely.
South Korea’s Craze About Cryptocurrencies
The young population of South Korea has turned out to become active cryptocurrency traders. Over 1.6 million South Koreans are cryptocurrency traders and transactions from this number make up over 10 percent of the trading volume globally. However, the nationals seem focused on altcoins and other higher-risk assets compared to Bitcoin and Ethereum.
To arrest the situation, South Korean authorities are placing stringent regulations on cryptocurrencies and exchanges. This reflects in the recent law that demands a 20 percent tax return on crypto gains.
Aside from this, regulators require exchanges to submit Information Security Management System certificates that functions as a license for their operations. It is expected that more regulatory policies might spring up as the “Coin Clean-up” operations Intensify.