This article comes fromThe Korea Herald, Original Author: Byun Hye-jin

Odaily Translator |

Odaily Translator |

South Korea’s local mid-sized cryptocurrency exchanges are shutting down after the country’s financial regulator recently found some illegal activities and will implement stricter regulations to allow them to operate, industry sources said on Aug. 1.

According to sources, the 11 exchanges that used the fraudulent collective accounts are likely to need to shut down as South Korea’s Financial Services Commission (FSC) plans to stop their trading and notify prosecutors and police of illegal activities.

The exchanges, whose names have not been disclosed, are unlikely to receive approval from the FSC to operate, industry sources said.

Industry watchers predict a string of crypto exchange closures later this year, as most exchanges, with the exception of crypto giants Upbit, Bithumb, Coinone and Korbit, have failed to open real-name accounts for customers, which is the key to their business operations. prerequisites. Additionally, several mid-sized exchanges have announced plans to shut down services or businesses.

Darlbit ceased operations on July 15 after notifying customers earlier last month that it would stop deposits and withdrawals.

CPDAX said on Friday (July 30) that it will close its services from September 1. "The closure of operations is not a temporary measure, but a permanent one. Those holding cryptocurrencies in their accounts must complete withdrawals by 3:00 p.m. on August 31," the company said.

Bitsonic announced through its official Telegram channel last Friday that it will temporarily suspend services to update the service system. "Once the update is complete, we anticipate implementing an Information Security Management System (ISMS)," the company said. An ISMS is a set of procedures for managing customer data by proactively limiting any security breaches. This is another prerequisite required for exchanges to operate in South Korea. But it's unclear whether this is a temporary shutdown by Bitsonic.The local exchange must be inFile with FSC by September 24 to seek approval to do business

. But the company said it would only get the ISMS after the service was suspended from Aug. 6 to Nov. 30. According to market insiders, due to this unreasonable timeline, combined with the considerable time it would take to implement the ISMS, Bitsonic was effectively shut down.Meanwhile, Rep. Cho Myeong-hee of South Korea's National Power Party is moving to seek to extend the filing deadline for local exchanges to Dec. 24. However,South Korean financial authorities recently stated that