In South Korea, 200 cryptocurrency exchanges risk being closed

In South Korea 200 cryptocurrency exchanges risk being closed - In South Korea 200 cryptocurrency exchanges are likely to be closed 1024x576The chairman of South Korea's main financial regulator, the Financial Services Commission (FSC), Eun Sung-soo, said all cryptocurrency exchanges in the country could be closed. South Korea currently has around 200 cryptocurrency exchanges, he added.

All exchanges may be closed in South Korea

During the general meeting of the Political Affairs Committee that took place last week, the Korea Times quoted President Eun.

"All 200 cryptocurrency exchanges in the nation could be closed after September once a special finance law goes into effect."

President Eun explained that cryptocurrency exchanges must be registered with the FSC under the revised law on special funds. This is the Law on Reports and Use of Specified Financial Transaction Information. 

"We are now accepting applications to officially register their business within the allotted time frame, but no stockbrokers have applied to date," he revealed. As no companies have been registered, he warned that "they may suddenly be closed in September".

The bill revising the Special Funds Act went into effect on March 25 and its provisions will apply on September 24 after a six-month grace period. The amendment requires cryptocurrency providers, including cryptocurrency exchanges, to meet 2 requirements:

  • obtaining the certification of the information security management system (ISMS)
  • issuing real name accounts

The Financial Services Commission is responsible for registering cryptocurrency exchanges that meet these requirements. However, many cryptocurrency exchanges fear that they will not be able to meet the requirements. Particularly regarding real-name accounts, which could lead to a mass closure of exchanges.

President Eun noted that cryptocurrencies are not currencies, noting that the government has repeatedly warned investors that their "sudden price fluctuations are dangerous".

Additionally, the FSC chairman said that the profits from cryptocurrency investments will be taxable starting next year. The Ministry of Strategy and Finance announced in February that from 2022, cryptocurrency transactions generated from income will be classified as other income and will be taxed separately at a tax rate of 20%.

Last week, the Seoul Metropolitan Government's Tax Department seized roughly $ 25 million worth of cryptocurrencies from hundreds of tax-unpaid cryptocurrency investors.

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But what do you think of the warning issued by the FSC chairman? Let us know in the comments section below.