All Cryptocurrency Exchanges in South Korea Could Get Shuttered Under New Act

27 April 2021 | Updated: 27 April 2021

According to a report by the Korea Times, the Chairman of South Korea’s Financial Services Commission (FSC), Eun Sung-soo, has warned that all 200 cryptocurrency exchanges in the country could get shut down in September once a specific financial law gets implemented.

He noted that cryptocurrency exchanges need to register with the Financial Services Commission under the revised Special Funds Act. Sung-soo explained that the Commission was “now accepting applications for them to register their business by the timeline, but no exchange operators have applied to date.” He warned defaulting exchanges that “they could be shut down suddenly in September.”

The revised Act got effected on March 25 and will get enforced on September 24, giving cryptocurrency exchanges a six-month grace period. The revised Special Funds Acts mandates cryptocurrency providers, like crypto exchanges, to comply with some requirements such as Information Security Management System (ISMS) certification and issuance of real-name accounts.

FSC Chairman Eun Sung-soo.

The FSC is in charge of registration for cryptocurrency exchanges that meet the conditions mentioned above. However, many cryptocurrency exchanges are worried that they might default on the requirement, especially on the real-name account bit.

Korea to Begin Taxing Cryptocurrency Transactions
Meanwhile, Sung-soo argued that cryptocurrencies are not currencies, highlighting that the Korean government has cautioned against investing in them, noting that their “sudden price fluctuations are dangerous.”

Additionally, the FSC chairman revealed that profits from cryptocurrency investment would get taxed from 2022. The Ministry of Strategy and Finance announced earlier this year that income gains from cryptocurrency transactions will get classified as other traditional income and will accrue a tax rate of 20%.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.