South Korean Cryptocurrency Exchanges Brace for Stricter Reserve Requirements

To enhance consumer safeguards, South Korean crypto exchanges will soon be required to maintain a minimum of 3 billion won (about $2.3 million) in bank accounts for protection. 

The Korea Federation of Banks introduced these guidelines in its “Virtual Asset Real-Name Account Operation Guidelines” in July. Set to take effect from September. These mandates apply to exchanges with real-name accounts from local banks and equate to 30% of their average daily deposits. Capped at 20 billion won. Notable platforms like Upbit and Bithumb are well-prepared for these changes. But smaller coin-only or crypto-to-fiat-less exchanges could face challenges. These exchanges are actively seeking bank accounts to align with the 2021 Specific Financial Information Act. Combating money laundering and terrorism financing. 

While some have secured accounts, anticipated difficulties lie ahead, particularly for players like Hanbitco racing to comply. In a parallel move, South Korea’s Financial Services Commission plans to introduce additional regulations by January 2024, mandating cryptocurrency issuers and owners to disclose vital information including token quantities, business models, and internal accounting practices.

Clever Robot News Desk 29^th August 2023