Until the end of 2020, the cryptocurrency industry was constantly growing in South Korea. The cryptocurrency industry gained a tremendous user base and investments from all groups and investment sectors from the country.
If you think that 2020 was the peak of cryptocurrency adoption and growth in South Korea, then you need to check the year 2021. In the year 2021, the cryptocurrency industry thrived and reached all-time highs in terms of investments, trades, and user base.
The recent surveys conducted by several companies within South Korea revealed that almost every age group in South Korea is interested to invest in cryptocurrencies.
Several people left their jobs to spend time investing in cryptocurrencies. Many people made huge fortunes dealing in cryptocurrencies and are having the best time of their lives. Even teenagers are interested to invest in cryptocurrencies and they have been increasing their investments day by day.
Back in April of 2021, even the entire stock exchange sector in South Korea was in a state of awe. The reason was that the cryptocurrency trades for a few days managed to surpass the daily trade volumes at the stock exchanges.
However, it seems that all the bullish-run and high-profile cryptocurrency industry in South Korea may soon come to an end. The reason is the new regulations that are coming into play starting September 25.
According to the new regulations, any entity that deals with cryptocurrency firms must share their transaction data with the police authorities in South Korea. The South Korean Government introduced this regulation to ensure that compliance with AML and KYC regulations must be met.
This is the reason why the banking institutions have started declining any contract renewal or new contract requests launched by cryptocurrency exchanges.
In order for any cryptocurrency exchange to operate, they must have accounts opened at the local banks where the transfers would be made. This is to ensure that each transaction flowing in and out of the exchanges is accounted for, and traces back to the rightful owner.
The country that the cryptocurrency industry perceived as a hub is now becoming a nightmare even for the local cryptocurrency exchanges.
The regulations being implemented by the end of September 2021 had already been communicated by the South Korean regulators towards the end of 2020. Initially, the South Korean Government had plans of implementing the regulations in January of 2021.
However, the requests from cryptocurrency firms in South Korea forced the regulators to push the implementation date further. Therefore, the South Korean regulators announced that the legislation would come into play from March. Once implemented, the cryptocurrency firms were given a 6-month grace period to ensure adoption is adhered to.
As a result of the above regulations, the cryptocurrency firms were to make contracts and open accounts with respective banks with real and authenticated details.