• South Korea’s top financial regulator, the Financial Services Commission (FSC), has begun a „comprehensive inspection“ of the nation’s crypto exchanges.
• The FSC wants to probe the 20 trading platforms that do not have licenses to trade fiat KRW, focusing on their anti-money laundering protocols.
• The FSC began its probe with GDAC due to their involvement in the controversial delisting of Wemix token last year.
South Korean Crypto Exchange Probe
South Korea’s top financial regulator, the Financial Services Commission (FSC), has begun a „comprehensive inspection“ of the nation’s crypto exchanges.
Trading Platforms Involved
The FSC specifically wants to probe the 20 trading platforms that do not have licenses to trade fiat KRW. This is „the first time“ the FSC has conducted a „comprehensive inspection“ of exchanges that do not operate in the fiat markets and will focus on anti-money laundering protocols.
Under South Korean law, exchanges can offer crypto-to-crypto trading services, provided they meet certain criteria. To obtain fiat-trading licenses, however, they must form partnerships with commercial banks.
These banks must provide all exchange users with real name-, social security number-verified accounts linked to their crypto wallets.
„Big Four“ Exchanges
The „big four“ crypto exchanges – Upbit, Bithumb, Korbit, and Coinone – have had such banking partnerships in place for several years. The remaining 21 South Korean exchanges have been left to pursue banking deals with domestic banks and only one – Gopax – has been successful.
The FSC stated that it would begin its probe with GDAC. This is one of the exchanges involved last year in the controversial delisting of Wemix token – a coin created by domestic gaming giant WeMade. GDAC left observers stunned when it announced that it would be listing Wemix just two hours after the „big four“ announced they would be removing it from their platforms.
- Some insiders believe that this is why FSC started its investigation at GDAC.
- Others think authorities may have started their investigation ahead of possible GDAC application to rejoin KRW market – which might suggest a behind-the scenes deal was struck with bank.
„Real Name Verification Accounts“
- Banks must provide all exchange users with real name-, social security number verified accounts linked to their crypto wallets.
GDAC officials said they had not yet been informed about date of FSC visit. It remains unclear what conclusions or results will come out from this comprehensive inspection by Financial Services Commission (FSC).