Eun Sung-soo, the chair of South Korea’s Financial Services Commission, said that all crypto exchanges in the country, over 200, could be shut down in September.
His remarks was made at a meeting of the National Assembly’s Political Affairs Committee last week, according to the Korea Times.
South Korea’s anti-money laundering and financial reporting laws was ammended to include cryptocurrencies last year, in an effort to stop illicit activities being funded with digital assets. The government has also said cryptocurrencies are more speculative and riskier than other asset classes.
Under the new regulations, crypto exchanges must register as virtual asset service providers and fulfil a variety of other criteria. These include implementing anti-money laundering strategies, having partnerships with local banks, becoming information security management certified and tracking real names of customers.
Eun said despite the application window opening on March 25th when the new regulations came into force, no crypto exchanges have submitted theirs yet. Crypto exchanges need to be approved by September 24th.
The new laws have put the South Korean crypto industry under pressure. At the moment, only the four biggest exchanges have partnerships with local banks and the other criteria, especially obtaining real names of customers, are difficult to fulfil. Additionally, they infringe on factors that make crypto investing appealing to traders in the first place, like anonymity.
South Korea’s crypto market is growing consistently and has surged in popularity over recent years.