In a bid to regulate the cryptocurrency industry, South Korean regulators gave cryptocurrency exchanges time until 24 September to register with the authorities to continue to function. However, the exchanges found this deadline too short.
Ergo, the country’s blockchain organizations urged regulators to push this deadline by six months. However, this plea may have gone unheard.
Existing regulations in South Korea make it difficult for small crypto-exchanges to acquire required paperwork and to obtain Information Security Management System [ISMS] certification. The same found mention in a joint regulatory audit that was carried out this week. In fact, out of 33 leading crypto-exchanges, neither had banking contracts in place. Nor did they put in place any anti-money laundering protocols. Moreover, management and security issues remain unresolved.
Lawmaker Cho Myung-hee of the Korea Fintech Association and People Power Party held a forum earlier today, one wherein participants discussed the extension of the deadline for the aforementioned reasons. According to reports, Representative (Rep.) Cho Myeong-hee and Rep. Chang-Hyun Yoon of the People Power Party have already proposed related bills that include extending the reporting deadline and introducing a specialized banking system that will be responsible for issuing real-name accounts on exchanges.
According to Do Hyun-soo, Chairman of the Virtual Asset Business Association of the Korea Blockchain Business Promotion Association [CEO of Probit],
“It is physically impossible to issue a real-name account until September 24.”
Others like Kim Hyung-Joong believe that if regulators do not show flexibility in extending the deadline, it may lead to the closure of many exchanges. However, authorities do not share this opinion. The head of the Financial Policy Division at the Office of Government Policy Coordination noted,
“It is difficult to overlook the concern that consumer damage will increase if businesses that do not meet the legal requirements extend their business.”
While exchanges are still dealing with unsupportive banking partners, the Financial Services Commission asserted that if exchanges are unable to comply with the Special Provision Act that was passed nearly one year and four months ago, “giving an additional six months will not change anything.”
Hence, it would seem that exchanges in the country are left to fend for themselves at this point.