South Korea Is Hoping for Regulatory Clarity as Crypto Laws Toughen

With the opening of Korean headquarters in Seoul, Cointelegraph looks deeper into the local regulatory landscape alongside Cointelegraph Korea's chief editor, David Lee.Midsized exchange's closure revealed larger problems.

Although South Korean exchanges are de jure permitted to trade Bitcoin and other digital assets, most of those platforms seem to be in a fix, as the recent closure of a local crypto exchange called Prixbit revealed.

Park Jong-baek, a partner at South Korean law firm BKL, told Cointelegraph, "Out of about six banks which set up such account system, only three decided to provide such account service to only big four exchanges."

A representative for Kdex, a top-10 crypto exchange in South Korea by trading volume, confirmed to Cointelegraph that it does not provide real-name virtual accounts despite attempting to register with local banks at least several times.

Still, the exchange's spokesperson added that it is "Currently in discussion with several of the largest commercial banks in Korea" regarding the issuance of virtual real-name accounts, which confirms the feature's importance for South Korean cryptocurrency exchanges.

It is difficult to confirm that information: There is no official data on the South Korean market, because the opening of a crypto exchange in the country doesn't require obtaining any registration, license or permit.

The "Bitcoin before blockchain"-like agenda has had its consequences on the local market: Namely, South Korean internet giant Kakao, which has over 50 million global users, is reportedly having problems listing its Klay cryptocurrency on local exchanges due to the ICO ban.

Apparently, South Korean blockchain projects have been "Flocking" to foreign exchanges over the past months.

"There is a real situation in which Crypto exchanges have a clear intention to use a real name verification deposit account service, but have have not even given a chance to receive it," the court said.

OKex, another exchange that has recently launched a self-regulated organization, or SRO, aiming to standardize crypto exchange compliance practices and policies across the world, has already started following FATF guidelines amid the general regulatory uncertainty in South Korea.