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Crypto exchanges in South Korea should shut down - TCR

source-logo  thecoinrepublic.com 28 April 2021 03:43, UTC
  • Crypto exchanges in South Korea are concerned because of FSC’s latest measures
  • If the exchange operators don’t apply for a license and meet the requirements, a mass shutdown could be observed
  • By next year, South Korean residents will have to pay a 20% tax on gains generated from cryptocurrencies

Crypto exchanges in South Korea are facing stressful times. Eun Sung-soo, the Financial Services Commission (FSC) chairman, has cautioned that all the cryptocurrency exchanges could be shut down. Simultaneously, the exchanges will shut down after September till a Special Fund bill takes effect. However, many digital asset exchanges are concerned, whether they won’t be able to meet the requirements. The prominent concern is regarding the real-name accounts, which can lead to a mass shutdown of such exchanges.

South Korean crypto exchanges are under regulatory threat

In the current scenario South Korea is alone having approximately 200 digital assets exchanges, and those are supposed to be shut down. All the exchanges are concerned due to the steps being taken by the FSC. 

Eun has explained that all the digital assets exchanges operating in South Korea were required to be registered with the country’s top financial regulator. The Special Fund Act went into effect on March 25, 2021, and its provision is expected to get enforced on September 24, 2021. Currently, the regulators are accepting applications so the exchange operators could officially register their operations. However, to date, no exchange operators have applied for the license, which could result in the mass shut down of such operations in the country.

Korean cryptocurrency exchange operators are concerned

According to Eun, cryptocurrencies are not currencies because of their sudden price fluctuations. Hence, the regulators have labeled the digital coins as dangerous and warned the users. 

Among 200 crypto exchanges, almost every exchange is concerned due to the harsh requirements of the AML laws. The major concerning fact is the requirement of real accounts, which can lead to a mass shutdown of the crypto exchanges.

Furthermore, the FSC chairman has also mentioned that profits on cryptos will be taxable from next year in the country. On the other side, the South Korean Ministry of Strategy and Finance has announced that from next year income generated from crypto transactions will be classified as “other income” and will be subject to taxation separately. It is also clarified that the imposed tax rate on such gains would be 20%.

Following the stances of the FSC, it is clear that the government is taking all possible steps to fight money laundering. Hence, the moves are part of a more comprehensive push towards regulating the industry.

thecoinrepublic.com