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New AML Rules in South Korea Force Crypto Exchange OKEx to Shut Down

UTC by Bhushan Akolkar · 2 min read
New AML Rules in South Korea Force Crypto Exchange OKEx to Shut Down
Photo: Shutterstock

Crypto exchanges OKEX gave an official notice asking users to close their trading positions and withdraw all their funds by the deadline period of April 7.

South Korea’s new anti-money laundering rules for crypto operations have finally started rolling in. The country’s most popular cryptocurrency exchange OKEx is the first victim of it. The arm of OKEx in South Korea has finally decided to shut shop rather than navigating through the regulatory hurdles.

OKEx made an official announcement for that same through a termination notice. The notice informs all of its users in South Korea that it will seize its operations starting April 7th. While OKEx hasn’t explicitly stated the reason for closing down its operations, the decision comes as the Financial Service Commission approved some amendments last week with the AML rules coming into effect this Thursday, March 25.

As per the amendment, all registered virtual assets service providers (VASPs) must file any suspicious transaction reports with the FSC. Furthermore, these VASPs should help FSC verify their customer identity and comply with inspections. The FSC has also made it clear that crypto companies involved in trading, custody, exchanges, sales, and other digital wallet services will get a six-month grace period to register with the regulator. Any failure to do so shall lead to non-compliance thereby facing potential sanctions.

FSC first called for the introduction of AML rules to its crypto industry, last year in November 2020. Earlier this month on March 5, Korea’s national assembly voted in its favor.

Important Information for OKEx Customers in South Korea

All OKEx customers from South Korea have been requested to close their trading positions and withdraw their funds by the April 7th deadline. Thus, users can either withdraw their funds in digital assets or in Korean Won (KRW). If users fail to do so “OKEx Korea will not be held liable for any losses arising from failure to withdraw by the customers,” notes the exchange.

Also, the withdrawal should be above the minimum withdrawal amount and fee. Although there’s no official statement from OKEx explaining the reason, an unnamed spokesperson spoke to CoinDesk. While not mention anything about the regulations, the spokesperson added:

“In addition to several other factors, actual profits from our Korean operation don’t add up to much, so we decided to cut our losses”.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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