A “historic moment” for South Korean Crypto Exchanges and Investors. The South Korean government and financial authorities decided officially to recognize Cryptocurrency exchanges as financial institutions and banks. This is a big step forward for Cryptocurrencies in South Korea, as the new changes will allow Crypto Exchanges to provide services at a bigger scale and with the support of local authority figures. The move is long awaited after months of harsh regulations and confusion around the Cryptocurrency Economy. It will also allow South Korean Crypto Exchanges to develop faster, provide secure trading options and prevent scams.
South Korean Crypto Exchanges are finally Financial Institutions
We’ve wrote numerous times about Cryptocurrency regulations in South Korea, because of their shear importance for the Crypto industry. The South Korean government had previously taken a harsh stance towards the industry and imposed severe regulations on South Korean Crypto Exchanges to prevent scams, security breaches and hacking attempts. The hack on the Bithumb Cryptocurrency Exchange was probably the turning point of 2018 that lead to the recent decision.
After regulations were postponed and in an interesting turn of events, South Korean financial institution authorities have decided to finally recognize South Korean Crypto Exchanges as regulated financial institutions. This is welcomed as great news for the industry, because the recognition will create new industry standards and help with the development of Crypto trading exchanges. Of course, the new industry standards will most likely have a negative impact at first, because they will be far stricter towards South Korean Crypto Exchanges and Investors, but will prove beneficial in the long run.
The new regulations will focus on Customer Verification and Personal information policies, and on combating Money Laundering. At the same time, the South Korean Crypto Exchange acceptance will bring increased security, because Crypto Exchanges need to comply with the already harsh regulations and also it will attract institutional investment capital to the ecosystem. The Cryptocurrency market will be considered as an emerging asset market, which will attract both Institutions and large-scale investors. The new regulations will also boost and encourage the developing decentralized applications and their developers. Both Ethereum and EOS will benefit from the regulations for sure.
Crypto Exchanges will only grow from now on
Before the decision, most South Korean Cryptocurrency Exchanges were thought as communication vendors, so the license to operate an exchange in South Korea could be bought for mere 20 US dollars. But the following weeks, Crypto Exchanges will be forced to acquire approval from the South Korean Department of Financial Intelligence and Cybersecurity agencies. Those that don’t acquire approval will be prohibited from operating in the region.
Crypto Exchanges becoming official financial institutions will provide the South Korean Financial Services Commission direct authority over the Digital Asset Sector. That’s why the Cryptocurrency Industry in South Korea will see many changes in the following months, both in infrastructure and policies. The South Korean Crypto Investors were one of the most active if not the most active in the past 365 days and the new changes will reflect on Cryptocurrency Prices, something that we will keep our eyes on.