By September 24, the real people of many cryptocurrency exchanges in South Korea will have to disclose risk management and partnerships with banks to secure trading accounts. Analysts say the rules could lead to the listing of hundreds of such wellcoins as well as attempts to forge alliances with banks.
“I must admit that I did not see the financial statements of the operators, but mainly invested based on the popularity of the currency and the advice of the media and friends,” said Eun, who trades in Medium on the country’s largest crypto exchange, OffByte. Now he has expressed concern that the metadium could be listed before the September deadline.
The new law was passed in early March and since then four of the more than 600 exchanges – Upbit, Bithamb, Quinon and Corbit – have registered partnerships with banks that have registered as virtual asset service providers. The law also requires them to obtain a security certificate from the South Korean Internet Security Agency. As of May, only 20 exchanges have received such certificates. Since the beginning of April, the price of Mattium in Upbit has dropped 99 percent to SKW 32.1 (around Rs 2,000) as several local cryptocurrency exchanges have removed dozens of weightcoins from their platforms.
At the end of June, Upbit closed 24 Wellquin businesses, including Commodo, Adex, Libre Credits, Ignis, Pika and Lambda. Another major operator, Bithome, pulled four coins last week. The small operator Probit removed 145 currencies simultaneously in June, raising concerns among investors that more coins could be withdrawn near the September deadline.
GeoPX, one of the four most popular exchanges in Korea, said it was in talks with several banks and was hopeful of meeting all requirements ahead of schedule. An official with the Financial Services Commission told Reuters that exchanges that did not meet the new rules would not need to be closed, but that it would not be easy for them to do business.
In the meantime, many investors have made up their minds to “hold on to the favorite life”. This is known as “HODL” in the cryptocurrency community. Lee Jae-kyung (227), who invested in SKW 400 million (about Rs. 226 million) in cryptocurrencies, said he had a 56.5 percent reduction in his holdings but had no plans to cut losses.
“I’m going to give up my currency investment because it’s already a lot I’ve lost, there’s no point in withdrawing now,” Lee said. “Bigger than that, I’ll hold on to it because I believe there will be another price increase later this year.”