South Korea has asked crypto exchanges to comply with new regulatory requests. Should the exchanges complete the process by June, the country’s first regulated exchange could launch near the beginning of Q3 2021.
South Korea is set to see its first regulated cryptocurrency exchange launch in the third quarter of 2021, according to local media outlet Yonhap News. The publication states that financial regulators have plans to ‘reorganize’ the market with the launch of the exchange, which could launch as soon as August or September.
The report also mentions that virtual asset service providers must file a report to the country’s regulatory authority, the Financial Services Commission’s Financial Information Analysis Agency (FIU), by Sept. 24. The move is a huge step forward for the country, which has begun taking sweeping actions for the cryptocurrency market.
The decision to launch a regulated cryptocurrency exchange accompanies the banning of privacy coins, taxation efforts, and a trial of Central Bank Digital Currency (CBDC). Regulators have also asked exchanges to follow compliance laws in the past, in a bid to protect investors and prevent the funding of illicit activities.
Regulation includes certification
One of the orders imposed is the approval of an Information protection Management System protection (ISMS). Twenty virtual asset service providers have received this certification, out of the 60 in total that have been identified. This certification is a recognition of the exchange’s ability to prevent security incidents such as hacks.
Another major point of contention is Know Your Customer and Anti-Money Laundering (KYC/AML) initiatives. Bitsum, Coinone, Kobit, and Upbit are the only four crypto exchanges that are operating using real-name verification deposit and withdrawal accounts. These exchanges have to file a report to the FIU, though none have done so far.
Whichever exchange follows through on all of these demands will become the first completely regulated exchange in the South Korean market. Should this be done by June, then the first exchange could come as early as August or September.
South Korea stepping up crypto regulations
The new information is yet another sign that South Korea is keen on ensuring complete regulation. The country’s National Assembly has submitted six crypto-related bills, including those related to crypto issuance, liability for damages caused by hacker attacks, taxation, and more.
Most individuals have welcomed the taxation law, though some have disagreed with the taxation laws, which they saw should be on par with the stock market. Most people, however, support the taxation laws.
The country is also planning to test and trial a CBDC, which would make it yet another major country to consider a CBDC. The Bank of Korea announced that it does not necessarily plan to release the digital currency, but rather wanted to test functionality and feasibility.