By the end of the registration period and licensing of South Korea’s digital currency exchanges on September 24 (October 2), about $ 2.6 billion in the capital of the country’s traders may be at risk.
to the Report CoinDesk, South Korea’s financial transaction reporting law, requires all digital currency exchanges to register with the Financial Services Commission by the end of this month. In order to combat money laundering and carry out the customer authentication process, South Korean exchange offices must be registered by domestic banks and create accounts with their real names for their customers.
The Financial Services Commission has advised exchanges that are unable to meet their legal obligations to notify their customers of a possible closure of their business by September 17 (September 26).
About two-thirds, or 40 of the 60 exchanges operating in South Korea, have not yet registered. Experts say this could be accompanied by the phenomenon of “banking onslaught”. Bank rush occurs when most customers try to withdraw their money for fear of the bank’s inability to pay its debts.
In more severe cases, the reserves of financial institutions have not been able to meet the cost of customer withdrawals. Experts warn that a similar thing could happen to smaller South Korean exchanges.
“Lee Chul yi, chairman of Foblgate, a medium-sized exchange, said:
As the deadline approaches, a situation similar to a bank attack is expected to occur, as investors will not be able to [برخی از] Cash your pennies listed only in small exchanges. Investors will suddenly realize that they have lost their assets. I would be surprised if legislators could manage the side effects of this measure.
The Financial Times reports that data show that approximately 90% of South Korea’s digital currency transactions are made using Altcoins. Some of them are known as Kimchi coins. Kimchi Quinn refers to tokens offered by Korean companies.
According to estimates by Kim Hyoung joong, director of the Digital Currency Research Center at the University of South Korea, the move is expected to kill about 42 Korean lawmakers.
Because Cho Yeon Haeng, president of the Federation of Financial Services Consumers in South Korea, has said that investors are expected to suffer huge losses by stopping trading and freezing assets. He says it is unlikely that many smaller exchanges will be able to protect their customers as they await forced closures.
Bitfront, a subsidiary of Japan-based technology giant LINE, is expected to stop providing services to Korean-speaking customers and paying with South Korean credit cards on Tuesday, as it seeks to appease lawmakers and cut ties. It is with South Korea.
Last month, Bainance Exchange removed trading currencies and ounce-based payment options (South Korean currency) from its platform in order to comply with its domestic laws.