11 South Korean Cryptocurrency Exchanges to Shut down Amid FSC Inspection: Report

11 mid-sized cryptocurrency trading venues in South Korea will reportedly cease their operations after the country’s watchdog identified that they operate their businesses illegally. The names of the exchanges remained undisclosed.

Chain of Reaction in South Korea

According to a recent report by The Korea Held, 11 mid-sized cryptocurrency platforms will soon shut down as the Financial Services Commission established that they run their operations without the needed authorization. Furthermore, the FSC will notify local authorities about the illicit activities.

Earlier in the year, many experts predicted that such chain closure of exchanges is highly possible as many of the venues – except the local giants Bithumb, UPbit, Coinone, and Korbit – failed to open up real-name accounts for clients.

The FSC did not reveal the names of those 11 platforms. However, numerous other mid-sized venues shut down their services recently. For example, in the middle of July, Darlbit ceased its operations. Last week CPDAX also announced it will halt its platform as of September 1st:

“It is not a temporary but a permanent measure to close business. Those who possess cryptocurrencies in the account must withdraw them before 3:00 p.m. on August 31.”

In its turn, Bitsonic took it to Telegram and revealed that it would temporarily stop its operations so it can renew its service systems:

“Once we are done with the renewal, we expect to achieve Information Security Management System.”

To operate legally in the country, Korean exchanges must get approval from the FSC by September 24th. However, Cho Myeong-hee – People Power Party Congresswoman – will attempt to extend that period until December 24th.

It is worth noting that at the end of June, small trading venues in South Korea were reportedly planning to sue the government for failing to come up with fair regulations.

Bithumb Involved in a Cryptocurrency Scam

Per a different report by the same media, the local police restarted an investigation about a fraud case involving a former top executive of South Korea’s leading cryptocurrency platform – Bithumb.

According to the Seoul Metropolitan Police Agency, the ex-chairman of the exchange – Lee Jung-hoon – offered 718 BTC and 7,793 ETH to the chairman of BK Group – Kim Byung-gun, after the latter vowed to take over Bithumb and promised to issue an unlisted coin called BXA.

Contrary to the promises, the two executives never materialized the deal. Moreover, 14 investors who granted funds to Lee argued that the chairmen are actually accomplices and embezzled the assets together.

The Korean authorities have not pressed any charges against Lee and Kim yet because of insufficient evidence for their illegal actions. However, the aforementioned investors reportedly submitted recordings and other proof in an attempt to uncover the case.