As the South Korean regulatory agencies are tightening their grip on the country’s cryptocurrency industry, several exchanges have started to halt trading services with high-risk minor tokens.
Local media Arirang reported on Wednesday that eleven out of twenty local cryptocurrency exchanges, which received a Security Management System certificate, have either halted trading with several tokens or issued a list warning the traders to be cautious.
The report outlined that leading Korean exchange Upbit has delisted five coins: Paycoin, Maro, Observer, Solve.Care, and Quiztok. Huobi Korea dramatically ended trading services with its own exchange token, Huobi token, while Coinbit suspended trading with eight cryptocurrencies and issued a warning list against 28 digital currencies.
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Suspension of trading with cryptocurrencies with low market capitalization is common across exchanges. But, the latest delisting of an array of tokens by South Korean exchanges clearly shows their eagerness to be on the good books of the regulators.
Is the Burden on Small Players?
The South Korean Financial Services Commission (FSC) became the sole watchdog of the country’s booming cryptocurrency exchanges last month. This came when the government mandated new exchanges to register themselves with the regulator and maintain real-name bank accounts of all clients. Additionally, existing exchanges have to comply with the updated framework before the deadline in December, which has recently been extended.
Moreover, the regulator is in the process of finding out all existing non-compliant exchanges operating in the local market and is seeking data from banks. Furthermore, the FSC ordered banks to consider cryptocurrency exchanges as high-risk clients and the mandated ID verification of all crypto traders.
However, only four major South Korean crypto exchanges currently maintain real-name accounts, while the smaller bunch are facing a hard time finding banking partners.