According to Business Korea, hundreds of minor crypto exchanges in South Korea could run smack into heightened scrutiny for failing to abide by proposed enhanced know-your-customer (KYC) regulations, which would require exchanges to only provide services to users with "real-name accounts" issued by local financial institutions.
Earlier this month, the Financial Action Task Force, an intergovernmental organization under the G7, proposed guidelines that encourage all crypto exchanges to share customer data.
Although industry executives and experts have indicated that the ruling of the FATF is highly impractical and may be counterproductive, many countries in the G7 and the G20 - including South Korea - are likely to follow the recommendations of the FATF.
Potential Impact on South Korean Crypto Industry
Hundreds of small crypto exchanges could be forced to exit South Korea. | Source: Shutterstock
Local reports have indicated that hundreds of crypto exchanges in South Korea may be kicked out of the region or pressured to close down their services based on their spotty track records if the businesses do not swiftly implement robust internal management systems.