South Korean Crypto Exchanges Required to Set Aside $2.3 Million in Bank Accounts

South Korean Crypto Exchanges Required to Set Aside Minimum Cash Reserves

In order to improve consumer protections, South Korean crypto exchanges will now be required to set aside a minimum of 3 billion won in bank accounts as a safeguard. Here are the key points:

The new requirements apply to exchanges that have real-name accounts issued by local banks.
The guidelines state that the required cash reserves should be 30% of the exchanges’ daily average deposits or 3 billion won and higher.
Major exchanges like Upbit and Bithumb are expected to implement the new measures without significant issues.
Smaller trading platforms operating on coin-only markets may face troubles as they don’t have bank accounts and don’t need to accumulate reserves.
The Specific Financial Information Act, introduced in 2021, requires compliance and has led to decreased trading volumes for smaller exchanges.

These new regulations aim to enhance customer authentication and will be implemented in January 2024. Additionally, the Financial Services Commission will implement rules in January 2024 that mandate local firms to disclose information about their cryptocurrencies.

Hot Take:

The new cash reserve requirements for South Korean crypto exchanges aim to strengthen consumer protections. While major exchanges are expected to adapt easily, smaller platforms may face challenges. These regulations, along with the upcoming customer authentication requirements, reflect the South Korean government’s commitment to regulating the crypto industry. The implementation of these measures will likely shape the future of the crypto market in South Korea.