For the first time in history, the government of South Korea has officially recognized crypto exchanges regulated financial institutions and banks.
Local publications in South Korea have reported that the financial authorities of South Korea have finalized their plans to categorize crypto exchanges as an industry called “Cryptocurrency Exchange and Brokerage” to enable trading platforms to perform at a large capacity with support from local authorities.
From Communication Vendors to Financial Institutions
For many years, the government of South Korea has considered regulating the cryptocurrency sector with practical regulations and policies, primarily to prevent large-scale hacking attacks and security breaches from occurring, as seen in the case of Bithumb and Coinrail in early 2018.
This week, local publications revealed that the government of South Korea has come to a consensus to recognize crypto exchanges as regulated financial businesses, creating a new industry dedicated to cryptocurrency trading platforms.
Crypto exchanges like Bithumb, Coinone, and Korbit will also be likely required to overhaul their internal management systems and drastically enhance security measures to remain in compliance with new policies.
NO MORE MINOR CRYPTO EXCHANGES
Previously, crypto exchanges were considered as communication vendors and trading platforms were only required to purchase $20 licenses to operate. In the upcoming months, crypto exchanges will be required to obtain necessary approval from the country’s cybersecurity agencies and the department of financial intelligence.
Regulating crypto exchanges as financial institutions will provide the Financial Services Commission (FSC) direct control and authority over the cryptocurrency sector. As such, concerning investor protection in specific, the cryptocurrency industry in South Korea is expected to see significant changes in the next few months.
