The Financial Services Commission, South Korea’s top financial regulator. Reportedly planning to shut down a dozen local cryptocurrency exchanges due to fraud allegations.
According to the local news agency The Korea Herald. The FSC will shut down at least 11 mid-sized crypto exchanges in South Korea due to alleged illegal activities. And fraudulent collective accounts. According to the publication, the names of the exchanges have not yet been revealed, citing anonymous industry sources.
According to the sources, the mentioned crypto exchanges will be unable to obtain FSC approval for operation. The authority is also planning to implement stricter regulations for smaller crypto exchanges in South Korea, according to the report.
The reports of the alleged shutdowns follow the recent closures of several smaller South Korean crypto exchanges. Bitsonic, a local crypto exchange, announced on its official Telegram channel on Friday that it would temporarily suspend operations due to “internal and external issues.”
CPDAX, another local crypto trading platform, has also announced that it will cease operations on September 1. Darlbit exchange had previously reportedly shut down operations after suspending deposit and withdrawal services last month.
The FSC did not immediately respond to a request for comment from Cointelegraph.
Authorities in South Korea have recently increased regulatory scrutiny of crypto exchanges, requiring local digital asset service providers to register their businesses and set up real-name trading accounts and reporting until September. In comparison to major crypto exchanges like Upbit, Bithumb, Coinone, and Korbit, smaller and medium-sized crypto exchanges have reportedly struggled to obtain licenses from appropriate authorities.
However, larger cryptocurrency exchanges in South Korea have recently run into regulatory issues. The Seoul Metropolitan Police Agency reopened an investigation into an alleged fraud case involving the former chairman of Bithumb, South Korea’s largest cryptocurrency exchange, according to Yonhap News.