Eun Sungs, chairman of the Financial Services Commission (FSC), South Korea’s top financial regulator, warned that all cryptocurrency exchanges in South Korea may be closed. He said that South Korea currently has about 200 cryptocurrency exchanges.

South Korea may close all cryptocurrency exchanges

In the plenary meeting of the Political Affairs Committee of the National Assembly last week, the Korea Times quoted Chairman Eun as saying:

Once a special financial law goes into effect, all 200 cryptocurrency exchanges across the country may be closed after September.

Chairman Eun explained that according to the revised “Special Funds Law” (“Reporting and Use of Specific Financial Transaction Information Law”), a cryptocurrency exchange must be registered on the FSC. He revealed: “We are now accepting applications from them to formally register their business before the timetable, but so far no exchange operator has submitted an application.” Since no company has been registered yet, he warned: “They may be in 9 The month closed suddenly.”

The revised “Special Funds Act” came into effect on March 25, and its provisions will take effect on September 24 after a six-month grace period. The amendment requires cryptocurrency providers, including cryptocurrency exchanges, to meet requirements such as obtaining information security management system (ISMS) certification and issuing real-name accounts.

The Financial Services Commission is responsible for registering cryptocurrency exchanges that meet these requirements. However, many crypto exchanges are concerned that they may not be able to meet the requirements, especially the requirements for real-name accounts, which may cause a large number of exchanges to close.

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Chairman Eun pointed out that cryptocurrency is not a currency, emphasizing that the government has repeatedly warned investors that its “sudden price fluctuations are dangerous.”

In addition, the FSC chairman stated that the profits from cryptocurrency investments will be taxed from next year. The Ministry of Strategy and Finance announced in February that starting from 2022, cryptocurrency transactions generated by revenue will be classified as other revenue and will be taxed at a rate of 20%.

Last week, the Seoul Metropolitan Government’s tax department seized approximately $25 million worth of cryptocurrency from hundreds of cryptocurrency investors who were in arrears with taxes.

What is your opinion on the FSC Chairman’s warning? Let us know in the comments section below.

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