According to sources, several mid-sized cryptocurrency exchanges in South Korea will be unable to receive FSC approval.
The Financial Services Commission, South Korea’s top financial regulator, is reportedly considering shutting down a dozen local cryptocurrency exchanges due to fraud allegations. According to local news agency The Korea Herald, the FSC will suspend operations of at least 11 mid-sized cryptocurrency exchanges in South Korea due to illegal activities and fraudulent collective accounts. According to the publication, anonymous industry sources claimed that the exchanges’ names were not yet disclosed.
According to the sources, the mentioned crypto exchanges will not be able to receive FSC approval for operation. Additionally, the report notes that the authority is planning to impose stricter regulations on smaller cryptocurrency exchanges in South Korea.
The news of the accused shutdowns comes from a recent suspension of operations by several smaller South Korean cryptocurrency exchanges. Bitsonic, a local cryptocurrency exchange, announced Friday in its official Telegram channel that it would suspend operations temporarily due to “internal and external issues.”
Another local cryptocurrency trading platform, CPDAX, also announced that it would cease operations entirely on Sept. 1. Previously, Darlbit exchange reportedly suspended operations following a month-long suspension of deposit and withdrawal services.
South Korean cryptocurrency exchanges have recently come under increased regulatory scrutiny, with authorities requiring local digital asset service providers to register their businesses and establish real-name trading accounts and reporting by September. In comparison to major crypto exchanges such as Upbit, Bithumb, Coinone, and Korbit, smaller and medium-sized crypto exchanges have reportedly struggled to secure licenses from appropriate authorities.
However, larger cryptocurrency exchanges in South Korea have recently encountered regulatory issues. The Seoul Metropolitan Police Agency, according to Yonhap News, reopened an investigation into an alleged fraud case involving the former chairman of Bithumb, South Korea’s largest cryptocurrency exchange.
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