11 South Korean Stock Exchanges Close Amid Investigations From Regulators

Several middleweight cryptocurrency exchanges in South Korea will close their doors when the country’s financial regulator begins an inspection of suspicious illegal activities.

Reportedly, the South Korean Financial Services Commission (FSC) will shut down a total of 11 local exchanges. All used fraudulent accounts, according to reports.

Authorities and reports had not disclosed the alleged exchanges at press time. However, reports indicate that the exchanges in question will not be able to obtain FSC approval for future operation.

FSC investigation comes in the wake of the recent closures of South Korean cryptocurrency exchanges. Darlbit, for example, would close after a suspension of withdrawal and deposit services.

Meanwhile, BitSonic has announced a temporary halt of operations as it renews its service systems. During the renewal, the exchange also said it would acquire an information security management system (ISMS). Several procedures are reportedly required for exchanges to function legally in South Korea.

Respect the rules

However, the FSC survey does not apply to the main stock exchanges in the country. investigation reportedly did not affect either Upbit or Bithumb, two of South Korea’s largest exchanges, due to the fact that both exchanges offer real-name account registration to their clients. Such registration is mandatory in South Korea for anti-fraud and money laundering reasons since 2018.

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Last month, Bithumb also banned its employees from investing or trading cryptocurrencies. company announced its new policy on July 2. It has not only been taken in line with some of the recent FSC decisions to restrict South Korea’s cryptocurrency market, but also in an effort to tighten internal regulations.

reports also indicate that Bithumb would implement a system that includes ongoing self-audits and internal reporting.

crackdown on cryptocurrencies in South Korea

More recently, South Korean authorities have turned their attention to tax evasion within the crypto space. Reports recently revealed that the government was considering changing tax codes to allow financial authorities to seize cryptocurrencies from any suspected tax evasion. Officials in South Korea seized $ 47 million in cryptocurrency due to unpaid taxes in June.

Local exchanges in South Korea are not the only ones facing repression from regulators. All currencies must be registered with the Korea Financial Intelligence Unit (KFIU) by September 24. Otherwise, it is reported that it will expose them to legal action and possible closure.

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