The extended deadline given to the non-certified crypto trading platforms in South Korean has also come to an end. The authorities now have no option but to forcefully shut down the thirty-seven platforms who failed to obtain mandatory certification even though they were warned time and again and were given fair opportunity to comply with the new regulation. Only 29 exchanges resorted to authorities and obtained the necessary certification and will therefore be able to continue their crypto business operations without any difficulty at all.
The authorities in South Korean wanted the crypto trading business shouldn’t be jeopardized at all. But it was necessary that the business should be regulated in some way acceptable to every stakeholder. Keeping in mind the interests of stakeholders, the authorities had passed a new regulation called “Reporting & Using Specified Financial Transaction Information Act”.
Under the Act, crypto trading platforms were to be given legal recognition on the condition that they obtain a specific certification. The certification was called “Information Security Management System” i.e. ISMS Certification. Once certification was obtained, the firms were further required to liaison with Financial Intelligence Unit (FIU) and tell them about the certification. In addition, if any crypto firm wanted to trade crypto with national currency pair won, then they were facilitated to seek bank accounts in real beneficiaries’ names.
The deadline for complying with the prescribed procedure was also set up which eventually expired in the start of September 2021. However, the deadline was extended twice to facilitate local crypto exchanges. But it seemed that the majority of crypto exchanges working in the country are not interested in obtaining the certifications. Even the non-certified companies were warned time and again to treat the warning seriously and seek their due certifications. But even then, none of them came forwarded. In the last warning, they were clearly told that if they will not comply, the authorities will have to shut their businesses down.
The last and final opportunity to comply with the requirement was ended on 24th September 2021. According to the information of the authorities, only 29 crypto trading exchanges obtained certifications. Thus, they will continue to do their crypto businesses without any difficulty at all. As regards non-certified crypto exchanges, it has been noticed that there were at least 37 non-certified crypto exchanges. Legally, since they have not obtained mandatory certifications, therefore, under the law their businesses become illegal. Resultantly, the South Korean authorities are empowered to take whatever action has been described under the relevant law.
It is expected that soon the 37 exchanges will be permanently shut down and they will be officially banned. In addition, the person running the non-certified firms can be put in jail and fines can be imposed. The maximum jail time for non-certification is 5 years.