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South Korea Acknowledges Cryptocurrency Exchanges As Financial Institutions

In a positive turn of events for the cryptocurrency market legitimacy worldwide, the government of South Korea has decided finally to regulate the cryptocurrency industry inside the borders of the country. The South Korean regulators supposedly will classify these businesses as “Cryptocurrency Exchanges and Brokerages” and they will have to comply with a series of requirement derived from this new classification. This according to an article published by CCN.
According to some local sources, the South Korean government was thinking about taking this step a long time ago, but was afraid that recognizing exchanges as legal businesses would mean that they were recognizing cryptocurrencies as legal tender. But anyway, the decision has been taken and this will affect cryptocurrency exchanges for better or for worse.
The first consequence of this new classification is that, most likely, security measures and procedures will be ramped up for existing and new exchanges. This will mean that most exchanges will be tested for compliance of tougher identity recognition policies and money laundering preventive measures. This because cryptocurrencies are often used by criminals as vehicles to move dirty money across borders.
Also, according to some sources, most little cryptocurrency exchanges will cease to exist, because the fee that the South Korean government will collect will be a lot higher for the operation of this kind of businesses. Before, the fee collected by the regulators was of approximately $20, what allowed small and micro cryptocurrency exchanges to flourish without more supervision. But now, they will have to pay higher fees and also a percentage of their revenue, something that will surely affect smaller ones.
The intent of the government of South Korea with this measure is to bring some income that has been evading them in the form of cryptocurrency sales and taxes, and also prevent cryptocurrency hacks by supervising exchanges directly through the regulation institution. this will boast inversion because investors will feel protected by a regulation framework directed to protect them. Earlier this year, Korean exchanges like Coinckeck and Bithumb were hacked and lost millions of dollars worth of cryptocurrency.

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