South Korean cryptocurrency traders face deadline to notify consumers of potential closures
The South Korean financial regulatory body FSC has requested that domestic cryptocurrency traders officially notify customers of potential closures by September 17.
The Korean won ranks third worldwide in bitcoin trading after the dollar and euro, contributing to about 5% of global transactions. The market is worth an estimated USD 2.6 billion, as mainly young, bitcoin-crazed investors crowd an unregulated market amid rising house prices and youth unemployment.
South Korea’s crypto market is taking a hit. To tidy up the country from mostly small digital exchanges and protect merchants from financial crimes, new rules mean domestic traders will have to register their exchanges with local banks before September 24. Industry insiders expect the market to contract by two thirds, with the impact to center on individuals since bitcoin does not hold as legal tender.
Although cryptocurrency is highly volatile, many young Koreans firmly believe they can move up the social ladder and make it big in crypto investments. Local traders on small exchanges are deemed to make substantial losses as assets freeze in the short-to-medium term. Expect a potential bank run and some traders to move their coins abroad, following suit of crypto-giant Binance — which curbed its dollar-to-won trade last month.
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