With FATF standards, only about 20 blue-chips will survive and 180s ‘Weed-Out’
Considering 1 year grace period to prevent investment loss from faltering exchange platforms
More to be out of business if capital requirements also applied
Korean Financial authority analyzed that only about 20 exchange platforms out of 200 may survive and 180 will be weeded out when cryptocurrency reporting · registering system is applied. Proportionately speaking, only 10% survive and 90% of them are kicked out. When the faltering exchange platforms weed out, the investment loss seems to be incalculable. Although the authority is giving 1 year grace period to prevent the damages, the situation may be magnified significantly for the cryptocurrency price as it may drop even before the shut-down of exchange platforms.
A person in concern of Korean financial authority on 14th said, “It is analyzed that only 20 of 200 exchange platforms will survive if cryptocurrency reporting system is applied. The rest(180) will be out of business.”
The analysis of the authority has in line with the recent global cryptocurrency regulation trends. Last month, Financial Action Task Force on Money Laundering(FATF) has held its general meeting in Orlando and provided the term of cryptocurrency not as a ‘currency’ but as a ‘virtual asset’. In addition, the cryptocurrency exchange platforms should be either licensed from the authorities or report & register its business to the authorities. As for the financial authorities, they are required to provide the anti-money laundering(AML) supervision device.
The National Assembly of Korea has proposed the ‘Amendments of Law on Specific Financial Transaction Report’ to provide legal grounds for cryptocurrency exchange platform regulations. The proposal is currently discussed at the State Affairs Committee of the National Assembly.
The financial authority is soon expected to sort out sound exchange platforms after the legal ground for the regulation is properly established. According to the amendments, the cryptocurrency exchange platforms will be classified as a ‘Financial Company’. It means that they would be required to report the name of their companies and representatives to the authority.
The exchange platforms without AML and Know Your Client(KYC) system would be weeded out. A person in concern of the authority said, “In accordance with the international standards and the ‘Amendments of Law on Specific Financial Transaction Report’, we will regard the AML and KYC as the primary qualification. These requirements make investors relieved.”
In addition, the so-called ‘Hive Account’ used by medium and small-sized exchange platforms will be prohibited. The person of authority said, “Hive account is strongly prohibited by the ‘Amendments of Law on Specific Financial Transaction Report’. The exchange platforms without the real-name verified account would be out of business.” Hive Account is a corporate account which the exchange platforms receive the investments. It was speculated that the hive accounts may be used without real-name verification and used for money laundering.
Korean financial authorities analyzed that only about 20 exchange platforms will remain after the legislation comes into effect. The authority is also planning to further strengthen the requirements. They are now in the discussion of the further capital requirement internally. Authorities believe that reporting name of companies and representatives is not enough to prevent possible investment loss. Another person in concern of the financial authority said, “Registering company name and address is useless in terms of preventing investment loss. The capital requirement needs to be applied just as financial companies.” If the capital requirement really applies, more of the exchange platforms would be kicked out from the business.
The problem is that the investment loss seems unavoidable when these exchange platforms are shut down. It is likely that investors would not be able to withdraw their funds in time.
The authority is planning to give 1 year of grace period to protect investors. The person of the authority also said, “We will give one year of suspending period to the exchange platforms. We will minimize possible investment loss during that period.”
However, investment loss seems inevitable as the price crashes before the platforms are shut down. The person of authority added, “The faltering exchange platforms need to be eventually closed. It is a delicate situation, considering the possible investment loss.”
Choi Hong (2019. 07. 15) (단독)당국 “암호화폐 거래소 신고제 도입시 90% 퇴출”
News Tomato retrieved from http://www.newstomato.com/ReadNews.aspx?no=907407
