The South Korean arm of the leading cryptocurrency exchange OKEx has decided to shut down its operations instead of planning to navigate revised regulatory hurdles that inherit effect on Thursday.
A spokesperson of the exchange added that the native currency market would become too difficult to navigate due to the new AML [Anti-money Laundering] safeguards for cryptocurrency-related businesses.
“Additionally to several other factors, actual profits from our Korean operation don’t add up to much, so we decided to chop our losses,” explained the spokesperson.
Beneath the revised Financial Transaction Reports Act, VASPs [Virtual Asset Service Providers] must undergo compliance inspections and verify user identities – something the exchange said it’s unwilling to try forward for within the case, consistent with the report.
The legislation also stipulates that the providers are required to file suspicious transaction reports to the Korea Financial Intelligence Unit and are answerable to the FCS [Financial Services Commission].
The new legislation offers a six-month grace period to firms engaging in services associated with crypto assets.
“Up so far we’ve offered most of our services with fiat on-ramps, but forming a bank partnership [for real-name accounts] is realistically out of reach,” added the spokesperson.
Earlier in Nov. last year, the FSC began undergoing legal amendments to legislation that made it mandatory for VASPS within the country to report the names of their users.
The move is in line with intergovernmental money-laundering watchdog the FATF [Financial Action Task Force] and its request to its over 200 member nations to assist them to prevent Money Laundering.
OKEx Korea earlier revealed earlier on 18th that it might cease operating within the native currency market until 25th March when the revised legislation comes into effect. It’s since only been operating markets in Bitcoin [BTC, -5%], Ethereum [ETH, -5.27%] and Tether [USDT, +0.08%].