South Korean bitcoin traders must register today with the Korea Financial Intelligence Unit (KFIU), a division of the Financial Services Commission (FSC).
Industry insiders expect nearly 40 out of 60 exchanges to be terminated before the regulation comes into effect next week. A requirement last week called on traders teetering on the brink of closure to notify their customers in advance. Many crypto traders have obtained security certificates but lack the bank partnerships which would permit trading to Korean Won.
Crypto traders are also relucted to use real-name accounts, a requirement created to protect against financial crimes but necessitating bank partnerships under the new rules. So far, just South Korea’s four strongest exchanges—Upbit, Bithumb, Coinone and Korbit—will remain legal.
South Korean authorities will continue to increasingly govern bitcoin transactions that have been operating in an unregulated market. Such trades are highly popular among the country’s youth and those seeking quick riches amidst increasing housing prices.
Local traders are expected to make notable losses in the short-term as many smaller exchanges go bust. Others that have chosen to halt trading in Won will be permitted to continue digital operations in the medium-term, before partnering with local banks out of necessity.
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Sabrine is an Analyst for Foreign Brief and a graduate student at Yonsei University in South Korea, specializing in foreign policy and security in East Asia. Previously, she contributed as a freelance writer for online publications and worked as a sub-editor for the Daily NK.