Reports from South Korea stated that there are many crypto startups leaving the country as tougher regulatory conditions are applied. This has led these startups to list their projects elsewhere with foreign exchanges being the beneficiaries of the situation.
The report released on August 19 stated that these companies and startups are increasingly looking towards foreign exchanges to help them realize their dreams of blockchain and crypto-related projects.
The government has recently made it more difficult for exchanges to deal with the country’s local currency, won. This has been accentuated by low transaction volumes experienced by many Korean exchanges.
Most exchanges are finding it difficult to open real name virtual accounts for their clients while more than 90 percent of the smaller exchanges in the country have been hit by low transaction volume.
The fact that the most affected are small exchanges could mean that quite a number of them may close shop in the near future if the situation doesn’t change.
Stricter Compliance Hurting Exchanges
Last month, most of the biggest exchanges in the country had to comply with stricter regulation to enable them continue with banking partnerships with Korean banks.
The FATF rule which came into effect demands that exchanges divulge all transactions made by the customers in an apparent bid to foster transparency. This has been widely criticized by many crypto users and enthusiasts.
The country’s government intends to bring Korean exchanges under the purview of the Financial Services Commission, the agency that has oversight functions over financial services. This would demand that all exchanges are licensed in the quest for more transparency.