Delisting small altcoins and shutting down trading platforms could cost investors more than $ 2.6 billion.
Almost two-thirds of cryptocurrency exchanges in South Korea could close due to non-compliance with new regulatory requirements, according to the Financial Times.
This gloomy outlook for the Korean cryptocurrency market is explained by the fact that the deadline for exchanges to comply with the new requirements is now only a few days away, but several platforms have failed. not yet implemented the guidelines given.
The Financial Services Commission (FSC) requires digital asset trading platforms to demonstrate, before the set deadline, that their transactions with clients are carried out with real people who have bank accounts under their real names. According to the financial watchdog, this regulation aims to protect customers and prevent activities such as money laundering and tax evasion.
As September 24 approaches, the Korean regulator expects all crypto exchanges to have adhered to the new requirements, in partnership with provider banks.
But according to the report, most of the country’s small platforms have yet to implement the required changes. As the post notes, nearly 40 of the 60 cryptocurrency platforms are at risk of having to shut down due to non-compliance.
Sources told the Financial Times that up to 42 small altcoins, known locally as “kimchi coins”, will be affected by an impending closure. Small platforms accounting for 90% of kimchi coin trading volume, the publication valued that losses could exceed $ 2.6 billion.
According to Lee Chul-Yi of Foblgate, one of the smaller exchanges, the crackdown will end with most traders “suddenly poor” due to the withdrawal difficulties caused by the money rush. According to Chul-Yi, the deadline will look like a “bank rush”, with people scrambling to liquidate their holdings.
The news appears to have sparked sales in the cryptocurrency market on Monday morning. As of this writing, Bitcoin (BTC) has fallen below $ 45,000 and Ethereum has fallen below $ 3,250, after correcting 3% and 5% respectively.
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