South Korea’s largest cryptocurrency exchange, Upbit, has leapt to become the first digital currency exchange for registering with the Financial Intelligence Unit (FIU)- the country’s market regulator.
As unveiled by the government body, the move comes after the exchange completed the requirement to meet the registration, which includes partnering with a local bank to capture customers data for Know Your Customer and Anti-Money Laundering controls.
According to earlier reports, several cryptocurrency exchanges operating in South Korea were having trouble setting up a partnership with banks. The entire crypto sector faces headwinds on the impending regulations. When the September 24 deadline comes, the FIU will take down the websites of exchanges that have not yet registered, and access to these exchanges by local consumers will be significantly impacted.
On the part of Upbit, its partnership was with K-Bank, a digital bank that will help facilitate real name verification. As reported, other named exchanges, including Bithumb, Coinone, and Korbit, have also secured a similar partnership, and are on track to register with the FIU before the deadline. The review of the application period for Upbit is three months. However, the exchange has bought itself time with the filed registration.
South Korea is taking its digital currency regulations very seriously. The same rules that bind local exchanges are also applicable to their foreign counterparts. In a move to wade off regulatory reprimand, Binance exchange removed all cryptocurrency trading pairs involving the Korean Won from its site. The inability to meet the regulatory standards have also pushed OKEx exchange to shut down its operations in the Asian country.
There is currently a frantic race amongst crypto stakeholders in South Korea to meet the regulators’ demand. The population is highly crypto-centric, and exchanges that scale the FIU’s demands are bound to see a boosted market with less competition.
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