South Korea to regulate crypto exchanges by the end of summer
The struggle to regulate the crypto industry continues in every country around the world. Many have asked whether it is even possible to regulate crypto, given that it is still an evolving technology that is still seeking its final form, use cases, price, and more. But, one thing that can be regulated in the meantime are companies that work with crypto, such as exchanges.
To that extent, South Korea has requested crypto exchanges that operate under its jurisdiction to comply with the new security requests, and to do it soon. If they manage to do it by June this year, the country might get its first regulated crypto exchange in early Q3.
South Korea’s effort to regulate exchanges
The country seems quite determined to make it happen and reorganize the market by launching a fully regulated exchange by August or September. Recent reports from the country’s local media also said that exchanges must file a report to the FIU (Financial Services Commission’s Financial Information Analysis Agency). This is South Korea’s regulatory authority, which has made several moves towards regulating the space.
South Korea already banned privacy coins, it held a trial of its own CBDC, and it engaged in taxing crypto. Now, it plans to regulate the exchanges, which were already asked to follow compliance laws before, in order to protect their clients.
One of the orders that was given to the exchanges was to get the approval of ISMS (Information Protection Management System protection). Out of 60 identified crypto service providers, around 20 have received the certification already. Owning this document means that the exchange is capable of preventing hacking attacks and similar security incidents.
Other than that, the exchanges have to enforce KYC and AML procedures. There are currently only four exchanges that operate using real-name verification withdrawal and deposit accounts, and those are Bitsum, Coinone, Upbit, and Kobit. They are requested to file a report with the FIU, although none of them did it as of yet.