According to reports, the South Korean Financial Services Commission (FSC) will close a total of 11 local exchanges. All of these exchanges have used fraudulent accounts according to reports.
At the time of going to press, authorities and reports have not disclosed the exchanges used for suspicious transactions. However, the report reveals that these exchanges will not receive FSC approval for future operations.
The FSC investigation was conducted following the recent shutdown of South Korean cryptocurrency exchanges.
Not All are Hunted
However, the FSC research does not apply to the country’s leading crypto exchanges. South Korea’s two largest exchanges, Upbit or Bithumb, were reportedly excluded from the investigation. This is because both exchanges offer their customers the registration of a real name account. Such registration has been mandatory in South Korea since 2018 for reasons of fraud and money laundering.
Last month, Bithumb also banned its employees from investing in or trading in cryptocurrencies. The company announced its new policy on July 2nd. This is not only in line with some of the recent FSC decisions to restrict the Korean crypto market, but also to strengthen internal oversight.
The report also indicated that Bithumb will implement a system that includes continuous self-assessment and internal reporting.
Crackdown on South Korean Crypto Holders
Recently, the South Korean authorities have turned their attention to the issue of tax evasion in the field of crypto. Recent reports suggest that the government is considering changing the tax law to allow tax authorities to seize cryptocurrency assets from anyone suspected of tax evasion. Due to unpaid taxes in June, South Korean officials seized $47 million worth of cryptocurrencies.
South Korea’s local exchanges aren’t the only ones facing pressure from regulators. All foreign exchange exchanges must register with the Korea Financial Intelligence Unit (KFIU) by September 24th. They will face legal action and potential closure if they fail to do so.