The CEO of the South Korean cryptocurrency exchange Bithumb has made some predictions regarding the upcoming new rules governing the national industry. In fact, the executive believes there will only be between four and seven exchanges surviving the new regulation.
Smaller Companies Unlikely to Meet New Banking, Anti-Money Laundering Protocols on Time
During an interview with Hanguk Hyungjae, Heo Baek-young made an apocalyptic forecast for the local crypto firms. He believes that smaller companies could “struggle” to meet the Information Security Management System (ISMS) certification requirements.
In South Korea, there are almost 50 crypto exchanges in operation as of press time. Upcoming regulations will become effective in March, but firms have been given a six-month grace period to meet the required measures.
The amended Special Financial Transactions Information Act was approved by the National Assembly finance committee in November last year.
Under the framework, crypto exchanges are required to follow a series of banking protocols, including linking customer accounts to individuals and their bank accounts that are verified by a local identification document.
Bithumb’s boss praised the new rules and believes his company is ready to meet all the requirements by the deadlines. Heo pointed out the importance of differentiating from “companies with bad intentions.” He said:
It is late to strengthen investor protection, but it is the right direction.
However, he still thinks that many other platforms could struggle to abide by new anti-money laundering (AML) protocols.
Is Anonymous Crypto Trading Coming to an End in South Korea?
The new rules also name the Financial Intelligence Unit (FIU) as the regulatory watchdog to oversee the South Korean crypto industry, which also seeks to end the anonymity in crypto trading.
Nowadays, Upbit, Korbit, and Coinone are considered major crypto exchanges in the country. Experts believe these companies are able to comply with the requirements imposed by the new regulations.
On Jan. 8, the South Korean government issued an amendment to introduce a tax on cryptocurrency trading profits. It will be enacted in February, and profits from buying and selling cryptos in South Korea will be taxed at 20% starting in 2022.
What do you think about the Bithumb executive’s words? Let us know in the comments section below.