According to the latest news, South Korea, the third-highest cryptocurrency trading country, plans to shut down cryptocurrency exchanges by September.
The head of the country’s Financial Services Commission, Eun Sung-soo, announced this in front of the National Assembly policy committee.
Many believed that South Korea’s positive approach to crypto contributed to China making a U-turn and backing blockchain technology after announcing threats against it. As a result, it had wide-reaching consequences as Asia is a leading driver of cryptocurrency, with its high-speed internet and young population driving the crypto.
Many people think that plans have links to the government wanting to save traditional financial institutions. However, officials say that it’s just a regulatory decision and nothing more.
On April 22, Eun Sung-soo, chairman of the main regulatory agency in South Korea, stated in a National Assembly policy meeting that cryptocurrency exchanges are not complying with the law. Therefore, the FSC intends to punish the country’s crypto exchanges.
Earlier, the country had passed laws that require crypto exchanges to register as virtual asset service providers.
The agency is warning that all the platforms will be shut down by September should the status quo continue.
According to some analysts, this new policy would remove small exchanges in the country as the prerequisite for an application for VASP status, to have a partnership with a local bank. So far, only the top four exchanges in South Korea have such partnerships. It’s worth mentioning that getting an official partnership may be difficult for smaller exchanges.
Eun Sung-soo stressed that the state could not effectively defend people against cryptos scammers. However, they intend to try to regulate the sector.
It’s evident that an official announcement of the ban will affect the global price of the dominant cryptocurrency, Bitcoin. South Korea is the world’s third-biggest crypto market, and such news would be harmful to cryptocurrencies.
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