On Friday, 2.2 million South Korean account holders will face crypto mayhem.
September 24 is a crucial day for South Korean cryptocurrency traders. Ahead of this day, the nation’s regulators organized a meeting that might shut most of the country’s trading platforms.
Many Trading Platforms Affected
The Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) held an unplanned summit to determine which exchanges were shut and which offered crypto-to-crypto trading. To be able to offer the latter option, trading platforms require security management system certification or ISMS. Until now, only Coinone, Bithumb, Korbit, and Upbit have garnered necessary banking partnerships that enable them to offer KRW-related services. However, even after frantic last-minute discussions with banks from these ‘big four’, all except one will be able to meet the deadline.
Per Donga from the FSC quoted an official from Gopax stating that the crypto company was in the midst of negotiations with a financial company to obtain a real-name withdrawal and deposit account. For now, Gopax will operate normally in the KRW market.
According to E Daily, there are 43 ISMS certificate-holding platforms. Out of this number, only 3 obtained their documentation before the deadline and reported it to the regulators. They are the Blockchain Company, Lawdians, and Delio. The ICT and Ministry of Science supervise the certification process. It reminded the crypto companies that ISMS certificate validity will last for 3 years after which they need to reapply for documentation.
In the meantime, FSC Chairman Koh Seung-Beom has sent a stern warning for investors. He stated that if traders are using an exchange that didn’t get its ISMS certification, then there is a risk of loss. Unfortunately, this is hardly any consolation for the millions of people who trade on non “big four” platforms. According to data compiled from the People’s Power Party, there are 2,216,613 active accounts on 18 platforms that will stop trading KRW. This is equivalent to USD 2bn!