South Korea’s top financial regulator, the Financial Services Commission, is reportedly planning to shut down a dozen local cryptocurrency exchanges amid fraud allegations.
The FSC will suspend operations of at least 11 mid-sized crypto exchanges in South Korea due to alleged illegal activities and fraudulent collective accounts, local news agency The Korea Herald reported Sunday. The publication cited anonymous industry sources claiming that the names of the exchanges were not yet disclosed.
The sources argued that the mentioned crypto exchanges will not be able to get approval for operation by the FSC. The report also notes that the authority is planning to implement stricter regulations for smaller crypto exchanges in South Korea.
The news on the alleged shutdowns comes amid several smaller South Korean crypto exchanges suspending operations recently. Local crypto exchange Bitsonic announced Friday on its official Telegram channel that it would temporarily halt operations, citing “internal and external issues.”
Another local crypto trading platform, CPDAX, also said that it would entirely shut down operations as of Sept. 1. Previously, Darlbit exchange also reportedly terminated services after suspending deposit and withdrawal services last month.
South Korean crypto exchanges have been under stricter regulatory scrutiny recently as authorities have required local virtual asset service providers to register their businesses until September and set up real-name trading accounts and reporting. Particularly, smaller- and medium-sized crypto exchanges have been reportedly struggling to secure licenses from appropriate authorities, as opposed to major crypto exchanges like Upbit, Bithumb, Coinone and Korbit.
Larger cryptocurrency exchanges in South Korea have also been facing regulatory issues recently, however. According to Yonhap News, the Seoul Metropolitan Police Agency Monday reopened an investigation into an alleged fraud case involving the former chairman of Bithumb, the largest crypto exchange in South Korea.