All cryptocurrency exchanges in South Korea except the largest four may be unable to meet the bank account requirements needed to stay in business. A number of Korean crypto exchanges are considering suing the government and financial authorities, claiming that the country’s crypto law is unconstitutional.
A number of exchanges are currently considering filing a lawsuit against the government and the financial authorities alleging the country’s crypto law is unconstitutional, Business Korea reported Monday.
The revised Act on Reporting and Use of Certain Financial Transaction Information requires cryptocurrency exchanges to submit a document by Sept. 24 showing that they have a real-name account issued by a bank.
However, banks in South Korea are reluctant to provide a real-name service to cryptocurrency exchanges due to money-laundering concerns.
Several banks, including NH Bank and Shinhan Bank, are conducting risk assessments on the country’s largest cryptocurrency exchanges: Upbit, Bithumb, Coinone, and Korbit.
However, no banks are willing to work with smaller crypto exchanges. Therefore, a large number of exchanges are expected to be forced to shut down.
One exchange told the publication:
These days, banks are refusing to initiate their cryptocurrency exchange verification processes without clear reasons and most exchanges are failing to get a chance to prove themselves. The Financial Services Commission needs to step in right away.
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