OKEx, the leading crypto exchange, is closing its South Korean operations owing to the nation’s severe AML regulations. The exchange announced its decision on its website. It will cease functioning in South Korea on April 7, 2021. Applications for withdrawals will not be accepted if they are lower than a decided minimum amount. The exchange entreated that all consumers settle their positions and withdraw their balances before the date. Moreover, OKEx is the first South Korean exchange to respond in this manner. The market remains uncertain about the reactions of other exchanges.
The decision arrives after OKEx Korea tentatively halted withdrawals on March 15 due to maintenance problems. The company did not stipulate its ground for terminating in the report. Notwithstanding, OKEx is a big name in the global cryptocurrency market. It has a minor appearance in South Korea. The local operations managed only $3.5 million in trade volumes in the last 24 hours, while the global platform managed up to $6 billion in trades, as per CoinGecko data. While the local affiliate was fighting for a decent bank collaboration, South Korea’s earnings also remained very low.
South Korea to Levy Taxes on Bitcoin Capital Gains
According to experts, the change in regulations might have acted as the final stroke to OKEx Korea. South Korea’s FSC (Financial Service Commission) set out new rules for VASPs (Virtual Asset Service Providers) last month. Moreover, the sudden closure of OKEx Korea occurs ahead of new regulatory management for cryptocurrencies and associated service providers that will come into force on March 25.
As per the regulations, VASPs, involving cryptocurrencies functioning in the country must confirm consumer identities. Moreover, Korean exchanges need to notify suspicious transactions and cannot accord order books with other exchanges. Korean authorities will continue periodic checks on VASPs to assure compliance with the AML regulations. The country has strengthened efforts to legitimize the cryptocurrency industry recently. It plans to levy taxes on Bitcoin capital gains from next year. Moreover, the South Korean branch of the world’s biggest crypto exchange, Binance, also closed operations in the country in early 2021. The company blamed the move on decreasing liquidity and low trading volumes of its major trading pairs.
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