The Korean financial regulator has ordered exchanges not to allow workers to trade on their platforms.
Bithumb has stated that the new law is now in effect.
Following recent measures by overseas regulators, South Korea has tried to toughen its stance on regulating local crypto companies. Local crypto exchanges have been directed to prohibit its workers from trading on their platforms as part of the new law, in order to increase internal regulation and improve transaction efficiency. The Korean Financial Services Commission (FSC) has ordered that exchanges register with local financial agencies before September 2021.
Bithumb, one of the country’s largest crypto exchanges, is one of the known exchanges that has imposed a legislation prohibiting its employees from buying or selling on the platform beginning next month.
Employees of the company received a written statement reporting account withdrawals last month. The employees also took a written oath to follow the new instruction.
From this month forward, we will use continuous monitoring, self-audit, and internal reporting system operation to ensure that staff follow the rules.
Bithumb has put a number of limitations on employees in recent months, including a ban on trading during working hours and trading in an asset 72 hours after it is listed. In addition, various proactive staff-related steps were taken years ago to combat market manipulation, unethical trading activities, and data leak protection.
If an employee is detected trading on the platform, exchanges that do not apply the rule by September 25 might face a fine of up to 100 million won (about $88,000) from the FSC.
Smaller exchanges are at risk of going out of business.
In addition, by September 24, the law requires local crypto exchanges to work with local banks to open accounts in consumers’ true names. Upbit and Korbit are anticipated to follow Bithumb in enforcing the rule. The FSC changed its financial reporting requirements in March, requiring exchanges to submit frequent transaction reports to the Financial Intelligence Unit of the FSC (FIU).
Larger exchanges, according to reports, will have little trouble achieving the requirements. However, up to 50 smaller exchanges could be forced to close. About 20 exchanges met with the FIU recently in a closed-door meeting to convey their concerns about the difficulty they face in meeting the real-name account requirement. Others are considering filing a lawsuit against the government for refusing to accept blame for the recent regulatory push. One unidentified crypto exchange representative aired his concerns to reporters: “These days, banks are refusing to commence their cryptocurrency exchange verification processes for no apparent reason, and most exchanges are being denied the opportunity to prove themselves.” […] The Financial Services Commission must intervene immediately.
Bithumb Exchange is a cryptocurrency exchange./n
