Cryptocurrency exchanges might take legal action against Korean government due to the the revised Act on Reporting and Use of Certain Financial Transaction Information, Business Korea has learned. According to local cryptocurrency exchanges, the government is responsible for the tight regulation, which may force them to shut down.
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"These days, banks are refusing to initiate their cryptocurrency exchange verification processes without clear reasons and most exchanges are failing to get a chance to prove themselves. The Financial Services Commission needs to step in right away," a group of exchanges told Business Korea.
According to the new regulations, each cryptocurrency exchange is obliged to get a real-name bank account. However, not all Korean financial institutions want to deal with them as the local banks are required to refuse services to any client who failed to comply with ID verification.
Earlier this month, iHodl reported that the Financial Services Commission (FSC) might require financial institutions to classify cryptocurrency exchanges as high-risk clients and subject to strengthened monitoring. The new guidelines will allegedly affect nearly 60 cryptocurrency exchanges in South Korea. Cryptocurrency exchanges will also have to submit a request for a license by September 24 to the Korea Financial Intelligence Unit.
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