While much of the South Korean crypto neighborhood is still commemorating the intro of the nation’s first- ever piece of crypto-specific legislation, others are warning that the frustrating bulk of crypto exchanges will likely go under when the new laws’ banking terms enter result.
Per news firm Yonhap, there are currently some 200 crypto exchanges in the nation, the majority of which are medium-sized or little business. That number might be trimmed to simply 10 by this time next year.
Under the regards to the new legislation– a modification on an existing financial deals act– exchanges will soon have to adhere to rigorous banking policies. These policies currently exist in the type of standards that need all consumers to utilize specific, real-name, exchange-linked bank accounts that are ensured by social security numbers.
As formerly reported on Cryptonews.com, the nation’s “big four” exchanges ( Upbit, Bithumb, Korbit and Coinone) are currently the only platforms in the nation that adhere to these policies, which were presented as non-compulsory standards in early 2018.
Establishing a system like this is incredibly lengthy, with banks typically stepping up their compliance guidelines on a month-to-month basis. At present, exchanges can just sign handles rely on a six-month basis, and the procedure for restoring such offers can be pricey and stuffed– even for well-backed platforms like Upbit and Bithumb.
Yonhap reports that as non-compliant exchanges and their executives might be struck with fines of up to USD 41,000 or prison regards to up to 5 years, numerous exchanges “will not be able to operate in the future.”
The news firm mentions that banks are likewise worried that they may end up being “overburdened” by handling exchange customers– and therefore may look for to turn them away.
And it appears that both crypto and banking market experts remain in arrangement that “exchange closures are inevitable.”
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An unnamed crypto market expert, states Yonhap, mentioned that “just about 10 exchanges, consisting of [the big four], will be able to established real-name accounts ahead of the enforcement of the new change in March 2021.”
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