21 South Korean crypto exchanges out of 63 that applied have received the ISMS certification from authorities, which deems them as having met various protection standards.
South Korea’s government has revealed that 21 crypto exchanges have received certification declaring that they are regulated. Local media outlet Yonhap Infomax reported the news, which notes that the government is keen on stopping illicit activity. The information released concerns the application status of 63 exchanges before the reporting period deadline of Sept 24.
Crypto exchange compliance
The certification, dubbed the Information Security Management System (ISMS), is a validation of an exchange’s administrative, technical, and physical protection measures of information systems. Certification acknowledges that the exchange meets the required standards, which attempt to maximize investor protection and minimize illegal activity.
So far, 21 exchanges have received certification, the most well-known of these being Bithumb, Coinone, Korbit, and Upbit. A sizable number of exchanges did not apply for certification, and it is unclear what their fate might be.
The country’s Korea Internet and Security Agency (KISA), which is supervising the certification process, said that the entire process takes three to six months from application. Any exchanges that have not applied now will miss the deadline.
One government official said,
“In the case of users transacting with virtual asset providers who have not applied for ISMS, there are concerns about damage due to business closure or business suspension.”
The report also notes that authorities had confiscated nearly $218 million from criminal activity. This crackdown shows that the government is serious about regulation, which is evident from recent developments.
South Korean government not pulling punches
The South Korean government has not held back since its decision to go harder on the crypto market last year. So far, the government has banned privacy coins, imposed more restrictions on exchanges, and taxed the asset class. The crackdown has resulted in 11 exchanges shutting down, with it likely for there to be more on the horizon.
The government is also experimenting with its own CBDC, which Samsung will feature in its Galaxy smartphones. The Bank of Korea said that blockchain and a CBDC would be part of a ten-year plan for the economy. All signs point to a pilot program for the digital currency soon.
Still, the market’s enthusiasm doesn’t seem to have dampened. South Korean banks reported that there was a 100% increase in crypto transaction fees in Q2. The number of users is also estimated to have experienced a five-fold increase.
Cryptocurrencies are undoubtedly popular in South Korea, and there has been some backlash against the high tax rate. But many citizens are comfortable with the rate, though younger investors generally oppose it more.