The Financial Services Commission (FSC) of South Korea plans to stop eleven cryptocurrency exchanges from operating in its region due to fraudulent activities. In a report by The Korea Herald on Sunday, the cryptocurrency exchanges will be suspended due to alleged fraudulent collective accounts and illegal activities.
The report does not name the exchanges, but it explains that undisclosed sources claim the companies will not get approval for operations from the FSC. There have been predictions of a chain closure of exchanges that refused to open accounts using their customers’ real names, an essential requirement for crypto exchanges operations.
The FSC recently made it mandatory for all local Virtual Asset Service Providers (VASPs) to register their businesses with the commission before September, and has kept a close watch on these companies ever since it passed the instruction. The financial regulator warned that service providers who refuse to comply with the directive could face up to five years imprisonment or pay a fine of 50 million won (US$43,455). Following the order, securing licenses from the authorities has become a struggle for small and medium-sized exchanges.
Unlike the smaller exchange companies, big crypto exchanges like Coinone, Korbit, Upbit, and Bithumb do not have to struggle to get licensed. However, these exchanges are currently battling with regulatory concerns as the former chairman of Bithumb is under investigation by the Seoul Police concerning a fraud case.
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