It was in October of 2020 when the Financial Intelligence Unit (FIU) in South Korea had issued an order for the cryptocurrency exchanges operating in the country. The orders were in the form of new regulations that were introduced by the Financial Intelligence Unit.
According to the orders, the cryptocurrency exchanges were required to open up accounts with the local banks in the country with their original names. Apart from that, the banks were also required to keep a close eye on the transactions being processed by the respective cryptocurrency exchanges.
This turned out to be a practically difficult task for the local banks to comply with and they did not want to become part of it. However, the banks did somehow worked with some of the major cryptocurrency exchanges aiming to operate in the country.
The Financial Intelligence Unit of South Korea had made it clear that any exchange failing to provide the required registration document by Friday, September 24, 2021, would be banned from operating.
When it comes to the implementation of the new regulation, the South Korean regulators gave two extensions before September 24, 2021, which was decided as the last date.
Following the implementation of the regulations surrounding crypto-operations, both the local and foreign cryptocurrency firms are required to have the registration submitted with FIU. It is surprising that out of the total exchanges, only 10 exchanges have been able to submit the required documentation with the FIU.
The Financial Intelligence Unit is reportedly the Financial Services Commission’s (FSC) anti-money laundering division. In the list of 10 cryptocurrency exchanges, there are several cryptocurrency exchanges such as Yonhap, Flybit, Korbit, Coinone, Bithumb, and Upbit. Since Friday, September 24, 2021, these major exchanges including four others are authorized to operate and trade in South Korea.
According to the latest regulatory implementation, the exchanges in South Korea are also required to acquire the ISMS certificate in order to operate in the country. The ISMS means the Information Security Management System certification that is acquired through the Internet and Security Agency.
The regulatory authorities have revealed that there were a total of 66 cryptocurrency exchanges operating in the country. Out of the total cryptocurrency exchanges, only 28 cryptocurrency exchanges have managed to acquire the ISMS certification until now.
If the cryptocurrency exchanges are not able to produce the required documentation, they would not be able to operate in the country in the South Korean language. Therefore, several exchanges including Foblgate, Coredax, and Flybit that are suspended the South Korean language through their platforms. Furthermore, these exchanges are no longer offering any won pairs or currencies to the South Korean locals.
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