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Crypto Exchanges shutdown in South Korea

South Korean authorities’ plans to shutdown cryptocurrency exchanges warned the top chairman financial regulator, Eun Sung-soo. The nation currently has about 200 cryptocurrency exchanges, he stated.

The South Korean shutdown plan was discussed during the meeting of the National Assembly’s Political Affairs Committee last week. The Korea Times quoted Chairman Eun as saying:

Financial Services Commission could shutdown all of the nation’s 200 cryptocurrency exchanges after September once a special financial law takes effect.

Chairman Eun explained that cryptocurrency exchanges under the revised Special Funds Act (Act on Reporting and Using Specified Financial Transaction Information) must be registered with the FSC.

He disclosed that,

“We are now accepting applications for them to officially register their business by the timeline, but no exchange operators have applied to date.”

He warned that, “They could be shutdown suddenly in September.”

The amended bill of the Special Funds Act went into effect on March 25. The country will enforce its provisions after a six-month grace period on September 24. The revision requires cryptocurrency providers to meet requirements such as obtaining Information Security Management System (ISMS) certification.

Crypto Exchanges shutdown in South Korea

For the cryptocurrency exchanges that meet these requirements, the FSC is accountable for registering these firms. Numerous crypto exchanges are concerned that they may not meet the criteria. More particularly regarding real-name accounts, leading to a mass shutdown of the crypto firms.

Cryptocurrencies are not currencies, as stated by Chairman Eun. The government has continually cautioned investors that their “sudden price fluctuations are dangerous,” he emphasized. 

Moreover, that profits from cryptocurrency investments would be taxable starting next year, stated the FSC chairman. From 2022, Income-generated cryptocurrency transactions will be classified as other income. As announced by the Ministry of Strategy and Finance last February, the firms will also be taxed separately at a rate of 20%.

Just from the previous week, the country’s tax department seized cryptocurrencies. It reported worth about $25 million from hundreds of crypto investors with delinquent taxes just from the previous week.

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