Only a Maximum of 7 Crypto Exchanges Would Survive New Regulations in KR
Over the course of time, South Korea has emerged as one of the countries that are focused on taking crypto-blockchain adoption to the next level. In the past couple of years, the South Korean government has taken many steps for crypto-blockchain developments in the country.
The Seoul capital in South Korea has even launched a $20 million funded project that will see new crypto-friendly startups receive funding from the government. The aim of the project is to create more adoption and job opportunities in the crypto-blockchain sector.
As the country makes more progress and development in the crypto-blockchain sector, it is also taking all the necessary steps to ensure that the industry is regulated.
In order to achieve this goal, the South Korean government had recently introduced a new regulation related to cryptocurrency assets. According to the new ruling, the cryptocurrency users whose annual crypto-holdings are more than 2.5 million won would be required to pay 20% tax.
When it comes to cryptocurrency exchanges, they will not be able to share the information of the users with foreign exchanges. As a result, all the cryptocurrency exchanges in the country have stopped sharing information with foreign exchanges.
There are also many other strict rulings that have been approved by the government of South Korea for the cryptocurrency industry. When the ruling was first approved, the regulations were supposed to be implemented from January 2021.
Later on, the pressure came in from the cryptocurrency communities and firms from all over the country to extend the time period for the implementation. The South Korean government did listen to the request and extended the implementation time to March of 2021.
However, the South Korean government later extended the implementation date to 2022. The South Korean government announced that it will give an ample amount of time for the crypto-firms in the country to start practicing the new laws and regulations.
Still, there are speculations that there will not be many cryptocurrency exchanges that would be able to survive through strict regulations. Recently, it was the CEO of one of the major cryptocurrency exchanges in South Korea that has made the same predictions.
As per the CEO of Bithumb, there will only be between four and seven cryptocurrency exchanges that would be able to survive in the strict crypto-regulations once they kick-in.
According to the CEO of Bithumb, there are currently more than 50 cryptocurrency exchanges operating in South Korea.
Once the new regulations kick-in, the exchanges will have to abide by the rule of real-name banking protocols. They will need to have the accounts of the customers linked to social security-authenticated and individual bank accounts.
Once that happens, it will be completed upon the discretion of the banks to make the contracts of users they want. Indirectly, the banks will end up ruling the exchanges that would kill the purpose of exchanges operating as decentralized entities.