With only 10 days left before the deadline for business registration under the Act on Reporting and Use of Certain Financial Transaction Information, it has become more visible which cryptocurrency exchanges will survive. As expected, not a few exchanges are likely to be closed down.
Under the new law, every cryptocurrency exchange in South Korea must complete its business registration by Sept. 24 by obtaining a real-name account from a bank and the Information Security Management System (ISMS) certification from the Korea Internet & Security Agency.
As of Sept. 10, a total of 28 coin exchanges obtained ISMS certification, according to a report released by the Ministry of Science and ICT and the Financial Services Commission (FSC) on Sept. 13. These exchanges will be allowed to continue their operations.
Yet, even though a coin exchange has obtained ISMS certification, it cannot operate a Korean currency market if it fails to secure a real-name account from a bank. It can only operate a coin market. Coredax and Flybit already announced last week that they would close down their Korean currency markets.
So far, only the top four exchanges in Korea — Upbit, Bithumb, Coinone, and Korbit — have received real-name accounts from banks and completed business registration.
Exchanges other than the 28 are highly likely to be forced to shut down. The FSC said exchanges that have failed to obtain ISMS certification as of Sept. 13 will be closed down as it takes at least three months to complete the certification procedure. The number of such exchanges amounts to 34.
Industry insiders predict that the cryptocurrency market will be eventually reorganized around the four major exchanges beginning from Sept. 25. Some watchers express concerns that one or two large exchanges including Upbit might monopolize the market. Upbit accounts for about 88 percent of domestic cryptocurrency transactions.