[2018-01-22]South Korean Exchange Korbit Stops Serving International Citizens

[Diced90]

Just recently news.Bitcoin.com reported on South Korean cryptocurrency exchanges implementing new infrastructure systems that comply with the country’s financial regulations. The enforced verification mechanisms will not allow anonymous users to sign up for a Korean-based digital asset exchange and trading platforms must report customer data. Now this week the Korean crypto-exchange, Korbit, has announced it will stop accepting deposits from international citizens.
New Regulations Require Trading Platforms to Make Infrastructure Changes
There’s been a lot of discussion and reports concerning cryptocurrency regulation in South Korea. This past weekend the country’s Financial Services Commission (FSC) revealed some information about a new ‘real-name’ verification system required for all domestic trading platforms. Now the popular South Korean exchange, Korbit, is halting funds from being deposited on its platform that stems from foreign citizens. Korbit has been operating since 2013 and was founded by Kangmo Kim, Louis Jinhwa Kim, and Tony Lyu. The exchange has a lot of cryptocurrency volume, and over the past 24-hours, it has swapped $135Mn USD worth of digital assets. 

Read more https://news.bitcoin.com/south-korean-exchange-korbit-stops-serving-international-citizens

[Slow death]

how other exchange accept citizens from all over the world and operate respecting KYC? the Korean exchange could not do the same thing? the Korean exchange could request documents like passport and proof of residence for all customers of the world and this way the Korean authorities could do periodic checks, it would not have any problem if they did it. So why do Korean authorities only want people from their country to use their exchange?

[richardsNY]

Pretty reasonable change if you ask me. It will mainly affect those who are looking to create a bridge between the Western and the South Korean exchanges for arbitrage opportunities. If we look at the South Korean market closely, it's a market that seems to be huge, but there is some massive volume inflation going on, which is similar to how Chinese exchanges were constantly enjoying higher and higher volumes. I wonder what will be left of their volumes once this artificial volume inflation takes a huge dip. Not much I guess. We have all seen how Chinese exchanges have shown their true nature after the PBOC actions....

[greeklogos]

how other exchange accept citizens from all over the world and operate respecting KYC? the Korean exchange could not do the same thing? the Korean exchange could request documents like passport and proof of residence for all customers of the world and this way the Korean authorities could do periodic checks, it would not have any problem if they did it. So why do Korean authorities only want people from their country to use their exchange?

Seems so, maybe that was one of the term to government allow to this exchanger to continue to work? South Korea has big population, but the exchanger definitely loose a lot of profit by closing it doors to users from other countries. I wander, will it be just a case or worldwide tend?

[1Referee]

but the exchanger definitely loose a lot of profit by closing it doors to users from other countries.

I don't think so. It's very difficult for foreigners to sign up there, set up a KRW bank account, have everything converted, and then have that KRW converted back to USD or EUR at a later point, etc. If we look at what South Korean markets have to offer over the other markets making it interesting for foreigners to sign up there, then it's just one thing, and that's the huge price gap of thousands of dollars. I am pretty sure that the number of people successfully looking to bank on that price gap are an extreme minority, and for that reason Korbit didn't had anything to protest for. The only thing these foreign traders are doing is milking that market dry, so what exactly will Korbit lose? I even think that Korbit is pretty content with this move.