New regulation in South Korea has forced several exchanges to close

[stompix]

In my brain these are different things. It's only the banks who can do such checks? I guess not. And if so, why are the partnership enforced with banks and not any kind of company that can do such tasks?

Because it's easier for the law to trace those payments if they want to, all the cashflow will be done through 1-2 banks and not spread across the entire system with exchanges making payments out of 100 accounts to 100 banks, probably a lot of times even for the same exchange user to different bank accounts.
Putting another player in this mess would simply give them more headaches and they don't want any whatsoever.

Sorry, I may be missing something, but for me this enforced partnership is not normal.

Nope, it's not normal and their FSA should track the source of all this at an individual level, but you see that nobody is that keen on doing that much work. Exchanges want to minimize their responsibilities by only checking names on an id and on bank statements, banks don't want to be just the gateway for people who are not their regular clients with credit cards/loans all that stuff,  and the state is lazy as usual.

I wonder if this affects S. Koreans who use foreign exchanges,... if not, I guess rather than closing down, the exchangea should seek for licenses to operate in other countries, then the people from the country could continue with them..

If they will deal with South Koreans wons, and they accept it as a currency or use it as a pair they will be forced to seek a license.
But, the opposite is happening: Bithumb to ban foreigners without mobile phone identification

[cheezcarls]

https://fortune.com/2021/09/17/south-korea-crypto-exchange-shut-down-bitcoin-regulation/

The regulation coming into place this week places unbearable compliance demands on crypto exchanges up to the point of only three of these being able to fully comply. SK is one of the countries where people have participated in crypto to a much higher degree than in most and this is not good news. Still, some of the exchanges remain open.

In 2022, the government will also introduce a crypto capital gains tax; investors who make over $2,135 in trading profit will face a 20% tariff.

It’s gonna be difficult if we live in South Korea right now as crypto enthusiasts. 20% tariff is very painful in our pockets when the crypto capital gains tax is going to be in effect. But for P2P trading, I think this is the safe haven but there are limits on how many buyers and sellers are there in South Korean who are doing P2P. There’s no doubt that US will be imposing stricter measures for the crypto industry as well. In the Philippines, I think they classify crypto as luxury tax (correct me if I’m wrong though).

[el kaka22]

New York had something like this back in the day. There were a lot of companies who were interested in moving to New York because financial world is there, wall street is one of the biggest financial hearts of the world, what they do there in wall street could impact the economies of whole nations. So crypto companies wanted to be there, Coinbase would have a huge headquarters right in the middle of wall street if the laws were not like that.

However, one day there was an idiot called Benjamin Lawsky who wanted to create something called Bitlicense to make sure regulations on crypto was harsher, and when he stopped working for his job, he became a consultant for companies who wanted to get bitlicense, so basically, he created his own retirement plan based on crypto in New York. Now many companies run away from New York, even if founded there, they go to delaware which has a lot more lax laws.

[noorman0]

20% is a very high percentage. With that figure, I think the Korean government should provide proper facilities and guarantees to those investors. I see the level of crypto crime cases in Korea is quite high.

Sorry, I may be missing something, but for me this enforced partnership is not normal.

This will be a rights war between 2 business entities, on the one hand the Korean government pressures the exchanges to get the customer's original identity rights through their bank partners, while the banking institutions ask to release the bank's responsibility for crypto crime cases.
https://news.bitcoin.com/korean-banks-to-be-relieved-of-liability-for-crypto-related-crime-report-suggests/

[bct_ail]

Does anyone have a list of the Exchanges that are located in South Korea?

[Ucy]

I wonder if this affects S. Koreans who use foreign exchanges,... if not, I guess rather than closing down, the exchangea should seek for licenses to operate in other countries, then the people from the country could continue with them..
I couldn't access the article in order to properly understand the issues/demands.

They might not be affected but the problem is that they might not be able to make withdrawals or conversions in their country since there's little to no exchanges available unless those remaining exchanges starts operating nationwide.

I guess they could use the peer-to-peer exchanges/wallets to make to conversions. There are several of them but I hope they can use the decentralized ones more.
They could have their funds in Bitcoin or in one of the main stablecoins then gradually convert their them to national currency when they need to spend them.

[stompix]

Does anyone have a list of the Exchanges that are located in South Korea?

I've searched a lot for that list too but seems like everyone is just pushing numbers without naming those exchanges.

Anyhow, if this helps, 4 of those granted the license are : Upbit, Bithumb, Coinone, Korbi.
There are 28 others who have been granted security certificates that will allow them to keep running but without having a won pair and accepting deposits, again no complete list as I haven't managed to find one:

The 28 exchanges that have been ISMS-certified include Gopax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax, and Okbit.

Anyhow, the newspapers I've read mentioned that the big four make 90% of the volume, so the hit will not be that hard, 10% volume lost which might actually migrate to those is not a matter of concern.

[bct_ail]

Does anyone have a list of the Exchanges that are located in South Korea?

I've searched a lot for that list too but seems like everyone is just pushing numbers without naming those exchanges.

Anyhow, if this helps, 4 of those granted the license are : Upbit, Bithumb, Coinone, Korbi.
There are 28 others who have been granted security certificates that will allow them to keep running but without having a won pair and accepting deposits, again no complete list as I haven't managed to find one:

The 28 exchanges that have been ISMS-certified include Gopax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax, and Okbit.

Anyhow, the newspapers I've read mentioned that the big four make 90% of the volume, so the hit will not be that hard, 10% volume lost which might actually migrate to those is not a matter of concern.

It seems to be really very small exchanges that will not continue. Otherwise, many users would have already received an email and would certainly have told us about it here in the forum.

"Should some or all services need to be closed, (exchanges) should notify customers of the expected closing date and procedures to withdraw money by at least seven days before the closure," the Financial Services Commision said earlier this week. It said this should be completed no later than Sept. 17.

https://www.reuters.com/technology/over-60-skorean-crypto-exchanges-set-suspend-services-next-week-2021-09-17/

I also think that we should no longer worry too much about the market being affected by this. There are only two days left and most people should have cashed out already. (Although some exchanges will certainly continue illegally  ).

[Silberman]

https://fortune.com/2021/09/17/south-korea-crypto-exchange-shut-down-bitcoin-regulation/

The regulation coming into place this week places unbearable compliance demands on crypto exchanges up to the point of only three of these being able to fully comply. SK is one of the countries where people have participated in crypto to a much higher degree than in most and this is not good news. Still, some of the exchanges remain open.

In 2022, the government will also introduce a crypto capital gains tax; investors who make over $2,135 in trading profit will face a 20% tariff.

Centralized exchanges are potential points of failure, which is why bitcoin is decentralized, it is inevitable that something like this keeps happening all over the world as governments either want a piece of the action and want heavy regulations so they can get taxes out of all of this or they want to reduce the speed at which bitcoin is expanding, and they plan to use this type of regulations to try to regulate bitcoin to death.

[Sithara007]

New controls in south korea have forced many exchanges to close because it could surprise many to name south korea as the main suspect in a major cyber attack. It is one of the poorest countries in the world and is isolated from the rest of the world in terms of technology economy and almost everything else also crypto decentralized has no government control here. The government cannot take any part of the profit in crypto no tax from now on that's why  thinking of stopping.

Are you confusing South Korea with North Korea? The OP referred to the South, as the new law is applicable there. No cryptocurrency exchange operates in the North. However, North Korean hackers have been accused of hacking many of the cryptocurrency exchanges which are based in South Korea and Japan in recent times. And it is impossible to take any legal action against them. North Korea is already under all sorts of sanctions and embargoes. It is not possible to impose any new restriction or penalty upon them.

[Lucius]

Anyhow, the newspapers I've read mentioned that the big four make 90% of the volume, so the hit will not be that hard, 10% volume lost which might actually migrate to those is not a matter of concern.

That's good to know, because all those billions of billions that will be lost in case 40 of the supposedly 60 crypto exchanges that operate in that country are closed seem to have served very well to create a FUD, along with the Evergrande scandal in China. It may just seem that way to me, but it seems that this part of the world constantly has some problems when it comes to cryptocurrencies (I mean Japan as well), because they have been regulating this market for at least 4-5 years, and as if they are constantly spinning in an enchanted circle.

I would expect that from corrupt politics, inefficient bureaucracy, but not from countries like South Korea or Japan - I do not hear that there are such problems in Germany or Switzerland.

[Anonylz]

I read and reread this article and I confess that I cannot understand why the Korean regulator requires exchanges to have partnerships with banks and at the same time empowers banks to reject or not partner with exchanges, we all know that the owners of banks are people from the political parties that most of the time govern the country and if the government is not liking cryptocurrencies, the banks will also not like cryptocurrencies because the banks follow what the government says or opines. i think this south korean behavior is typical behavior of someone who doesn't want cryptocurrencies in their country

If not total control what else could it be! This is the only sure way they can dip their claws in the crypto space, almost everyone has a bank account or will do one thing or the other with bank, forcing exchange to partner with banks is the smartest way to get control over the crypto activities in that country.

[ethereumhunter]

https://fortune.com/2021/09/17/south-korea-crypto-exchange-shut-down-bitcoin-regulation/

The regulation coming into place this week places unbearable compliance demands on crypto exchanges up to the point of only three of these being able to fully comply. SK is one of the countries where people have participated in crypto to a much higher degree than in most and this is not good news. Still, some of the exchanges remain open.

In 2022, the government will also introduce a crypto capital gains tax; investors who make over $2,135 in trading profit will face a 20% tariff.

Centralized exchanges are potential points of failure, which is why bitcoin is decentralized, it is inevitable that something like this keeps happening all over the world as governments either want a piece of the action and want heavy regulations so they can get taxes out of all of this or they want to reduce the speed at which bitcoin is expanding, and they plan to use this type of regulations to try to regulate bitcoin to death.

So with the banning that happens in South Korea, people will search for decentralized exchange and leave the centralized exchange so they do not have to worry if the government closes the exchanges anytime. They can still trade and make money while they can convert their profit into their currency. The government can do anything to make sure their people follow their rules and if necessary, they will force their people to KYC with full requirements.

[stompix]

It may just seem that way to me, but it seems that this part of the world constantly has some problems when it comes to cryptocurrencies (I mean Japan as well), because they have been regulating this market for at least 4-5 years, and as if they are constantly spinning in an enchanted circle.
I would expect that from corrupt politics, inefficient bureaucracy, but not from countries like South Korea or Japan - I do not hear that there are such problems in Germany or Switzerland.

Probably a barrier in understanding them since we've got used to our European way of doing things and we appreciate them only for the things that are missing here, all the way ignoring the problems they have that we don't experience. I've never been to China or SK, but I've been to Japan and to be honest, it was quite a disappointment from what I've expected, it's a far stricter country than what the net says, by far more rules on anything, and many more things some that will make a foreigner feel really uncomfortable.
This need for rules, their way of making rules to prevent something from happening in the first time, unlike us Europeans who make rules to prevent something from happening again the third time is maybe dictating their policies. I have seen this with the covid response, while people in Europe are fighting over the requirements to wear a mask I've never seen such news there, nor against the rules, it's probably their mentality, a society that is built only on rules and need rules for everything.

To get a better picture of this we would need probably to gauge the response from people in those countries, what they think of those regulations, how many are against, how many are for them, but there is a complete lack of information, we can't even get a list of those damn exchanges.

[AicecreaME]

https://fortune.com/2021/09/17/south-korea-crypto-exchange-shut-down-bitcoin-regulation/

The regulation coming into place this week places unbearable compliance demands on crypto exchanges up to the point of only three of these being able to fully comply. SK is one of the countries where people have participated in crypto to a much higher degree than in most and this is not good news. Still, some of the exchanges remain open.

In 2022, the government will also introduce a crypto capital gains tax; investors who make over $2,135 in trading profit will face a 20% tariff.

Crypto has been eyed for so many years now by the government not only in South Korea but almost every country in the world.

The government is trying so hard to get a grip on the cryptocurrency community. The legal status of crypto in one's country has its consequences. It's a matter of giving and take situation wherein the citizens can benefit from the opportunities offered by crypto, and at the same time, the government will benefit from it too by means of imposing certain rules and policies to be abided by the citizens such as paying proper taxes.

By doing this, the essence of crypto being decentralized is slowly being neglected. Although it's still up to the people to whether use platforms such as exchangers that use KYC or not. Privacy isn't much more of the people's concern nowadays anyway. But yeah, this isn't a piece of nice news given that a huge percentage of tax will be mandatory to be paid by the investors and traders that are earning income thru crypto.

[tabas]

If not total control what else could it be! This is the only sure way they can dip their claws in the crypto space, almost everyone has a bank account or will do one thing or the other with bank, forcing exchange to partner with banks is the smartest way to get control over the crypto activities in that country.

And as well as impose a hard punishment for those that won't comply to the mandatory regulation of South Korea. It's their way to control and regulate since there's massive money and profits that they can take from forcing exchanges to follow them.
But they have to weigh things and if most of these exchanges won't comply and will just start their new office offshore, it's going to be a big loss on their country.

[kryptqnick]

https://fortune.com/2021/09/17/south-korea-crypto-exchange-shut-down-bitcoin-regulation/

The regulation coming into place this week places unbearable compliance demands on crypto exchanges up to the point of only three of these being able to fully comply. SK is one of the countries where people have participated in crypto to a much higher degree than in most and this is not good news. Still, some of the exchanges remain open.

In 2022, the government will also introduce a crypto capital gains tax; investors who make over $2,135 in trading profit will face a 20% tariff.

Wow, first this, and today the central bank of China announcing that crypto operations are illegal. Things aren't looking good in two countries where cryptos are quite popular. Tough regulations are better than outright bans, but they can still have a major negative impact. As for $2135 of profit, the crucial data I can't see is per which period? Per month, per quarter of the year, or per year? These are all very different limits, and honestly, if it's per month, it might not be that tough, especially if it's zero below this sum. But I'm more into progressive taxes. After such bad news, I think Bitcoin is doing fairly well. I hope we won't see a significantly more serious deep, though.

[GubiMixa1292]

Yes, talking about Korea has created many problems for cryptocurrencies like bitcoin in the past, but I think they will end that soon. I wonder if this affects Koreans using foreign exchanges. outside or not, ... if not, I guess instead of shutting down the exchange should look for a license to operate in other countries. And it's getting harder and harder to stay in business while it's up and running. Things will become restrictive and the law will intervene.

[paxmao]

I think that the latest price movements are related to this new regulation. While China has made similar moves in the past, SK is much more influential as there is a huge amount of trade, particularly if you look at the size of the country and the population. Part of it has to do with the fact that many you Koreans just cannot have access to a home of their own unless they belong to the top 20% of students or wealthy families.

[goldkingcoiner]

This seems astonishingly backwards and counter productive for South Korea. This is not only going to send the exchanges away to nearby countries with lower regulations but I doubt anyone will ever fully trust South Korea with anything crypto- related in the future. Oh well, I say they are going to pull an India and take it all back when they realise how big crypto- and especially Bitcoin will become.