Requirements for Crypto Exchanges In South Korea

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The South Korean Financial Services Commission (FSC) is finalizing proposed regulations for cryptocurrency exchanges. According to The Hankyoreh daily newspaper on Tuesday, the proposed regulations “would treat the operation of cryptocurrency exchanges (such as Bithumb, Coinone, and Korbit) as unauthorized fundraising.”

Currently, cryptocurrency exchanges fall under the Act on Consumer Protection in Electronic Commerce Transactions. That means “they can be operated as an e-commerce website by anyone who registers as an online vendor,” the news outlet detailed. “While the FSC regards cryptocurrencies not as a financial instrument but as unauthorized fundraising, it recognizes that they are already being traded around the world,” the publication noted, adding that the Commission plans to allow the exchanges to operate under certain terms. An FSC official detailed:

"Cryptocurrency exchanges will be required to maintain standards for consumer protection, such as having separate deposits for customers’ assets, and for increasing transparency, such as having a procedure for confirming customers’ identity. The authorities will also be empowered to prosecute exchanges that break these rules."

In August, Democratic Party lawmaker Park Yong-jin submitted a proposed revision to the Electronic Financial Transactions Act. He proposed that anyone entering into a digital currency business, including operating a cryptocurrency exchange, must obtain a permit from the FSC, the publication detailed.

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South Korea establishes six conditions for the performance of Crypto-Coins market exchanges
South Korea has been a headline in domestic and international vehicles due to possible regulatory measures in the crypto-currency market within the country. Regulating one of the world's largest digital currency markets could affect the global market. According to the latest news, the government of the country is preparing a bill that tries to prohibit all transactions involving crypto-coins, unless they occur through brokerage firms that meet the six conditions imposed by it.