South Korea's JoongAng Daily: South Korea's small cryptocurrency trading platforms may be forced to close

According to the Korea JoongAng Daily on April 21, many small cryptocurrency trading platforms may be forced to close due to the reluctance of local banks to open real-name bank accounts for small cryptocurrency trading platforms. According to the amendment to the Financial Services Commission (FSC) "Reporting and Using Specific Financial Transaction Information Act", all companies engaged in virtual asset trading, storage and management need to report their business to the Korea Financial Intelligence Unit (KoFIU). The amendment took effect on March 25 and gave trading platforms a six-month grace period. In order to report to the Korea Financial Intelligence Unit, Korean trading platforms must find banks willing to open real-name accounts for their virtual asset customers, otherwise the trading platforms will be forced to close because investors who use exchanges that are not registered with the Korea Financial Intelligence Unit will be prohibited from trading with financial companies and banks. This makes it impossible for users to transfer money from personal bank accounts to exchanges, and vice versa, thereby preventing the purchase and withdrawal of cryptocurrencies. South Korea's four largest cryptocurrency trading platforms-Bithumb, Coinone, Upbit and Korbit have successfully reached cooperation with banks, but about 100 small trading platforms have not yet reached cooperation with banks. Unregistered trading platforms that fail to complete registration within 5 months will be forced to close. Since banks are now given the responsibility of screening various trading platforms, they are unwilling to take risks and will not easily open real-name accounts for cryptocurrency trading platforms. The South Korean government announced on April 18 that it plans to crack down on any illegal activities involving cryptocurrencies (such as money laundering and fraud), which has put more pressure on banks.