Regulatory bodies are cracking down on crypto exchanges around the world. Following Binance's FCA ban, certain South Korean exchanges have also started facing the heat from their country's financial watchdogs.
South Korean Crypto Exchanges In Hot Water
According to the latest report, certain cryptocurrency exchanges in South Korea are currently at risk of being denied access to personal bank accounts on charges of having “too many coins” on their trading platforms.
The Korea Federation of Banks, which represents major commercial banks and state-run lenders, had recently drawn up a risk assessment guideline that classifies exchanges with “a high number and frequency of virtual money transactions” as high risk. This guideline was created for use by commercial lenders in the process of real-name account issuance.
According to a recent amendment to the Act on Reporting and Using Specified Financial Transaction Information, exchanges need to find banks willing to partner with them to issue the accounts. This entrusts the banks with the responsibility of evaluating the risk and transparency quotient of these exchanges. Therefore, exchanges that have failed to find a partner bank are at risk of being shut down.
“Low Credibility” Altcoins Could Indicate “High Risk” Crypto Operations
Further criteria categorized by the guideline to deem an exchange “high-risk” was the listing of multiple altcoins with “low credibility” as well as the offering of financial services that stood out from regular transactions. Furthermore, the nationalities and occupations of the exchange’s virtual asset customers were also put under the microscope by the guidelines.
As a result, multiple crypto exchanges have been removing some altcoins from their platforms or placing them on a warning list in preparations for the stricter rules set to take effect in September.
UK Financial Watchdog Bans World’s Largest Crypto Exchange
The UK’s Financial Conduct Authority (FCA) has recently denied permission to the Binance Group to conduct regulated activities in the country. Because of the country’s laws which regulate certain activities like futures and options trading in crypto assets, the exchange is now prohibited from engaging in such operations from June 30th. Furthermore, since Binance had rescinded its application to become a registered crypto exchange, it will be unable to engage in unregulated services as well, bringing the company’s offered services to a screeching halt.
Binance Facing Global Scrutiny
This is not the first time that Binance has been in the crosshairs of financial regulatory bodies. Being the largest crypto exchange in the world has put the company in the limelight and invited more scrutiny. Currently, the exchange is being investigated by regulators in the US and Europe. It has also received another warning from Japan due to conducting unregistered operations.
Commenting on the different restrictions imposed upon it by regulatory bodies, Binance had previously stated,
“We take a collaborative approach in working with regulators, and we take our compliance obligations very seriously."
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.