South Korean crypto regulatory authority FSC to ban 11 crypto exchanges. Anonymous resources claimed that multiple mid-scale crypto exchanges in the country won’t be able to convince FSC to approve their operations in South Korea.
The Financial Services Commission planned to impose a sanction on several local crypto exchanges amid fraud allegations.
FSC will soon impose a ban on 11 local crypto organizations as these exchanges are involved in illegal activities and fraudulent collective accounts. However, these organizations will not be disclosed publicly, for security reasons.
This news was reported by a local Korean News agency The Korea Herald on Sunday. Authorities have validated these claims today. The report further added that authorities have decided to impose even stricter regulations on small and middle-scale crypto mining and exchange services.
It seems that authorities are focused on targeting small and middle-scale crypto organizations. The news comes amid multiple smaller South Korean crypto exchanges suspending operations recently. Authorities have defended their stance by claiming that smaller local exchanges are increasingly involved in illegal activities.
On the other side, a local crypto exchange, Bitsonic disputed these claims. Bitsonic announced Friday via its official Telegram channel, that like many other small exchanges it would also terminate operations, for an undefined period. Bitsonic cited “internal and external issues,” as primary reasons for the suspension of its operations.
South Korean crypto experts expressed that the main reason behind the crackdown against local exchanges is pressure from multi-chain crypto exchanges. Another local South Korean crypto exchange, CPDAX, also followed the footsteps of Bitsonic. CPDAX hinted to shut down its operation entirely as of Sept. 1.
Previous, at the start of last month, Darlbit exchange also discontinued its operations by suspending its deposit and cash withdrawal services in North Korea. The South Korean crypto sector has been under intense regulatory scrutiny. Regulatory authorities have demanded local crypto companies register themselves by the end of September and set up real accounts with all the required information.
The small-scale agencies have accused that authorities on purpose delaying license offerings to small-scale crypto organizations. The sole purposed behind this act was to pave way for the big giants. The economies of scale have played an important role. Regulating small crypto exchanges is a hectic task. Authorities would not get the desired benefits from small exchanges.
In the case of big exchanges, there are very few crypto exchanges in South Korea. So, regulatory authorities would get desired benefits, and the burden of regulatory complications would not be that much. Major crypto exchanges such as Upbit, Bithumb, Coinone, and Korbit can easily secure their license to operate in the country.
