The CEO of South Korean cryptocurrency exchange Bithumb made some predictions about the upcoming new rules governing the national industry. In fact, the executive believes that only 4 to 7 exchanges can survive.
Smaller companies are unlikely to meet new banks on time, anti-money laundering agreements
In an interview with Hanguk Hyungjae, Heo Baek-young predicted the end of the world for the local cryptocurrency company. He believes that smaller companies may “try” to meet the information security management system (ISMS) certification requirements.
As of press time, there are nearly 50 cryptocurrency exchanges operating in South Korea. The forthcoming regulations will take effect in March, but a six-month grace period has been provided for businesses to comply with the required measures.
In November last year, the Finance Committee of the National Assembly approved the revised “Special Financial Transaction Information Law.”
Under this framework, cryptocurrency exchanges are required to follow a series of banking agreements, including linking customer accounts to individuals and their bank accounts, and verifying them through local identification documents.
The boss of Bithumb praised the new regulations and believes that his company is ready to meet all requirements before the deadline. Heo pointed out the importance of distinguishing from “malicious companies.” He said:
It is too late to strengthen investor protection, but this is the right direction.
However, he still believes that many other platforms may have difficulty complying with the new anti-money laundering (AML) agreement.
Will South Korea’s anonymous crypto trading end?
The new rules also named the Financial Intelligence Unit (FIU) as the regulatory agency that oversees the South Korean cryptocurrency industry. The agency is also trying to end anonymity in cryptocurrency transactions.
Nowadays, Upbit, Korbit and Coinone are considered the main cryptocurrency exchanges in the country. Experts believe that these companies can comply with the requirements of the new regulations.
On January 8, the South Korean government issued an amendment to tax the profits of cryptocurrency transactions. It will be promulgated in February, and starting from 2022, profits from buying and selling cryptocurrencies in South Korea will be taxed at 20%.
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