According to an expert from South Korea, the local regulator does not take into account the losses of projects that have placed their tokens on exchanges closed after the regulation tightened.
The Financial Services Commission of South Korea (FSC) on March 25 enacted amendments to the Financial Institutions Reporting Act (FTRA). The regulatory document requires cryptocurrency exchanges to license to comply with anti-money laundering (AML) rules and to separate their own and user-owned crypto assets with the maintenance of accounts with banking organizations in South Korea.
Exchange operators were given six months to register with local authorities. Trading platforms that were unable to register before September 24 were forced to shut down. As a result, 35 cryptocurrency exchanges were closed. Only the giants of the cryptoindustry remained on the market: Upbit, Bithumb, Coinone and Korbit. They managed to conclude contracts with banking organizations for servicing accounts with mandatory identification.
South Korean regulator
statedthat despite the closure of 35 exchanges, the crypto industry suffered minimal damage. The analysis showed that 35 marketplaces that did not meet regulatory requirements make up only 0.01% of the Korean cryptocurrency market. On September 21, on the closed exchanges, there were only $ 3.5 million in user deposits. For comparison, in April this figure was $ 220 million. FSC obliged the exchanges that ceased operations to return deposits to their users within 30 days.
Earlier, the president of the Korean Financial Technology Association, Kim Hyong-jun, warned that the closure of exchanges would bring losses to the industry by more than $ 2.5 billion. In his opinion, when calculating losses, one should take into account the damage caused to the developers of local crypto projects.
After the regulator’s statement, the expert noted that the statement did not say anything about the damage associated with the delisting of local cryptocurrencies that were placed on closed trading platforms. As a result of the closure of exchanges, 42 local cryptocurrencies left the market, he said. These coins were only listed on cryptocurrency exchanges that were not registered.
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