South Korea's Financial Regulator Tightens Measures Against Illegal Activities on Crypto Exchanges

by Giorgi Kostiuk

2 years ago

Made with AI

Laws and Regulations
Cryptocurrency Exchanges in South Korea
Current Market Situation

South Korea’s Financial Supervisory Service (FSS) announced plans to crack down on cryptocurrency exchanges across the country. This marks the first big move under the new Virtual Asset Users Protection Act.

Laws and Regulations

This law packs a serious punch, including life sentences for those who illegally rake in more than 5 billion won (about $3.7 million). South Korea’s exchanges collectively represent about 5% of the global cryptocurrency trading volume.

The FSS will establish market order through stern punishment against illegal activities that may be identified in the process of its inspection, and will push for the revision of regulations if necessary by identifying the areas in the system where improvements are needed.

Cryptocurrency Exchanges in South Korea

Altogether, the country hosts four major won-based exchanges: Upbit, Bithumb, Coinone, and Korbit. Beyond those, the FSS will also be scrutinizing three more exchanges and one cryptocurrency wallet provider. Upbit controls roughly 83% of the total trading volume, with Bithumb at second place with 13%, while Coinone and Korbit each hold around 1.1%.

Current Market Situation

The surge in activity is partly due to the renewed interest in crypto after the recent changes in regulations. High trading volumes in South Korea are largely driven by retail investors, who are known for their active trading strategies and interest in altcoins. In contrast, markets like the U.S. see more institutional trading. The total daily trading volume across all cryptocurrency exchanges is approximately $20 billion. Binance leads with a daily trading volume of about $7.29 billion. Binance has reported holding approximately $92.7 billion in total assets across its platform, including various cryptocurrencies and stablecoins. Coinbase’s reserves are estimated at around $30 billion, primarily in Bitcoin and Ethereum.

The tighter controls on cryptocurrency exchanges in South Korea aim to ensure user safety and prevent illegal activities. The new law reflects the regulators' serious intentions to maintain order in the cryptocurrency market.

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