South Korea‘s Financial watchdog has reportedly shut down eleven cryptocurrency exchanges for their involvement in illegal activities.
According to The Korea Herald on Sunday, the Financial Services Commission (FSC), South Korea’s top financial regulator, has ordered the closure of 11 local cryptocurrency exchanges due to their involvement in illegal activities.
Darlbit and Bitsonic are two South Korean digital asset trading platforms that have recently announced that they will close their doors, but the full list of exchanges that will close remains unknown.
Upbit and Bithumb, the country’s two largest crypto exchanges, have escaped the crackdown because they are among the few crypto trading platforms that provide customers with real-name bank accounts.
In an effort to combat money laundering and other fraudulent activities, South Korea has made real-name registration mandatory since 2018.
Banks were hesitant to extend partnerships with local cryptocurrency exchanges, according to U.Today, due to the low risk-to-reward ratio of such deals. Partnerships with major players like Bithumb have been extended till September.
As a result, several smaller trading platforms found themselves in a tight spot.
Local cryptocurrency businesses are not exempt from the regulatory crackdown. By September 24, foreign crypto exchanges must register with the Korea Financial Intelligence Unit (KFIU). Otherwise, they will be forced to close their doors or risk criminal penalties.