South Korea Cracks Down on Crypto Exchanges
South Korea’s financial watchdog, the Financial Supervisory Service (FSS), is getting serious about regulating cryptocurrency exchanges. The FSS is planning to root out any illegal activity, which is a big deal, considering that South Korea’s exchanges account for about 5% of the global cryptocurrency trading volume.
The FSS is using the new Virtual Asset Users Protection Act as its weapon. This law has some serious teeth, including life sentences for anyone who illegally rakes in more than 5 billion won (about $3.7 million).
The FSS is focusing on the four major won-based exchanges:
- Upbit
- Bithumb
- Coinone
- Korbit
They’re also looking into three other exchanges and one cryptocurrency wallet provider. The FSS is making it clear that they mean business:
> “The FSS will establish market order through stern punishment against illegal activities that may be identified in the process of its inspection, and will push for the revision of regulations if necessary by identifying the areas in the system where improvements are needed.”
It’s worth noting that exchanges like Upbit and Bithumb are seeing trading volumes that haven’t been seen since the 2017 crypto boom. This surge in activity is partly due to renewed interest in crypto after recent regulatory changes.
Upbit is the biggest player in the game, controlling a whopping 83% of the total trading volume. Bithumb comes in second with about 13%, while Coinone and Korbit each hold around 1.1%.
The high volume in South Korea is mostly driven by retail investors, who are known for their active trading strategies and love for altcoins. This is different from markets like the U.S. where institutional trading plays a bigger role.
The total daily trading volume across all cryptocurrency exchanges is approximately $20 billion. Binance leads the pack with a daily trading volume of about $7.29 billion.
Binance has reported holding approximately $92.7 billion in total assets across its platform, including various cryptocurrencies and stablecoins. Coinbase’s reserves are estimated at around $30 billion, primarily in Bitcoin and Ethereum.
This crackdown in South Korea is just one example of the growing regulatory scrutiny of the cryptocurrency industry worldwide.
