South Korea financial services Commission is making a move to ban cross-trading on all country’s Crypto exchanges. Moreover, this move is a part of a raft of the country’s act. The act is on reporting and using Central financial transaction information amendments.
However, cross-trading is an illegal practice in many jurisdictions. Moreover, it involves offsetting buy and sell orders for the same asset without recording the transaction on the order book.
Bemoaning the planned prohibition
Moreover, according to Newsis, a local media outlet report, South Korean exchange operators have bemoaned the planned prohibition. They are stating that the move would cause significant disruptions to their already strained operations.
Choke the fund’s flow
However, some South Korean Crypto exchange operators say that the planned move could choke the flow of funds into the platforms. Several exchanges in South Korea reportedly cross-trade in order to enable them to convert fees charged in Crypto to Korean won.
An industry official commented on the practice. Theoretically, the ban prevents platforms from being able to transfer these fees from Crypto to fiat currency. However, the planned ban would mean compulsory zero Commission trading, which helps to eliminate the revenue that would have been earned from trading fees.
New Business creation
Another source said that the South Korean Crypto exchanges would be forced to create a new business to convert trading fees to fiat currency. Moreover, the move could also pose significant challenges for tax payments.