The chairman of South Korea’s top financial regulator, the Financial Services Commission (FSC), Eun Sung-soo, has warned that all of the country’s cryptocurrency exchanges could be closed. South Korea currently has around 200 cryptocurrency exchanges, he said.
All crypto exchanges could be closed in South Korea
At the general meeting of the National Assembly’s Political Affairs Committee last week, the Korea Times quoted Chairman Eun as saying:
All 200 cryptocurrency exchanges in the country could close after September once a special finance law goes into effect.
Chairman Eun stated that cryptocurrency exchanges must be registered with the FSC under the revised Special Funds Act (Act on the Reporting and Use of Specified Financial Transaction Information). “We are now accepting requests to officially register their business on schedule, but so far no exchange operators have applied,” he said. With no companies registered, he warned that “they could suddenly shut down in September”.
The revised draft law of the Special Fund Act came into force on March 25th and its provisions will be enforced on September 24th after a six-month grace period. The change stipulates that cryptocurrency providers, including crypto exchanges, must meet requirements such as: B. Obtaining ISMS certification (Information Security Management System) and issuing accounts with real names.
The Financial Services Commission is responsible for registering cryptocurrency exchanges that meet these requirements. However, many crypto exchanges are concerned that they may not be able to meet the requirements, especially with respect to real name accounts, which can lead to a mass shutdown of the exchanges.
Chairman Eun noted that cryptocurrencies are not currencies and stressed that the government has repeatedly warned investors that their “sudden price fluctuations are dangerous”.
In addition, the FSC chairman said that profits from cryptocurrency investments will be taxable from next year. The Ministry of Strategy and Finance announced in February that from 2022, income-generated cryptocurrency transactions will be classified as other income and taxed separately at a tax rate of 20%.
Last week, the Seoul Metropolitan Government Tax Bureau seized around $ 25 million worth of cryptocurrencies from hundreds of crypto investors with delinquent taxes.
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