• South Korea’s Financial Services Commission (FSC) is conducting a “comprehensive inspection” of the nation’s crypto exchanges.
• The FSC specifically wants to probe the 20 trading platforms that do not have licenses to trade fiat KRW.
• GDAC has been targeted first, likely due to its involvement in the controversial delisting of Wemix last year.
South Korea’s Crypto Exchange Probe
Regulator Launches Comprehensive Investigation
South Korea’s top financial regulator, the Financial Services Commission (FSC), has begun a „comprehensive inspection“ of the nation’s crypto exchanges. The FSC specifically wants to probe the 20 trading platforms that do not have licenses to trade fiat KRW. This is „the first time“ the FSC has conducted a „comprehensive inspection“ of exchanges that do not operate in the fiat markets and will focus on anti-money laundering protocols.
Exchanges Can Offer Crypto-to-Crypto Trading
Under South Korean law, exchanges can offer crypto-to-crypto trading services, provided they meet certain criteria. To obtain fiat-trading licenses, however, they must form partnerships with commercial banks. These banks must provide all exchange users with real name-, social security number-verified accounts linked to their crypto wallets. The „big four“ crypto exchanges – Upbit, Bithumb, Korbit, and Coinone – have had such banking partnerships in place for several years while the remaining 21 South Korean exchanges have been left to pursue banking deals with domestic banks with only Gopax having been successful so far.
Which Exchanges Will Be Investigated?
The FSC stated that it would begin its probe with GDAC which was involved last year in the controversial delisting of Wemix token created by WeMade Gaming Giant. It appears that there may be a behind-the-scenes deal struck between GDAC and a bank prompting this investigation as officials from GDAC said they had not yet been informed about an official date for an investigation by FSC authorities.
Big Four Stand Out From Other Exchanges
The Big Four Crypto Exchanges – Upbit, Bithumb, Korbit, and Coinone – stand out from other South Korean Exchanges as they were able to form partnerships with commercial banks much earlier than their counterparts and thus obtained fiat trading licenses quicker as well as established real name-, social security number verified accounts linked to their crypto wallets much earlier too..
Is There A Deal Between GDAC And A Bank?
It remains unclear whether there is any deal between GDAC and a bank prompting this investigation but insiders believe that this might be why FSC decided to start its probe at GDAC before any other exchange could apply for reentry into KRW market or some other reason entirely different altogether..