Chinese Cryptocurrency Exchanges Delay Launching in South Korea Due to Regulation
Two major Chinese cryptocurrency exchanges have delayed their launches in South Korea due to uncertainties surrounding the government’s regulation. The regulators are currently working on a real-name identification system that will end the anonymous trading of cryptocurrencies in the country.
A Bump in the Road to Korea
Ever since the Chinese government closed down China’s crypto exchanges in September, two of the country’s largest crypto trading platforms have been preparing to enter the South Korean market. “Huobi and Okcoin have delayed their planned launches in Korea amid the tightening of government regulations,” the Korea Herold’s the Investor reported on Wednesday.
Okcoin established a subsidiary called Okcoin Korea in October with a plan to start a trading service in December of last year. Initially, the platform would support 10 cryptocurrencies, including bitcoin (BTC), bitcoin cash (BCH), and ether (ETH). However, the news outlet elaborated:
The plans were scrapped at the last minute due to growing uncertainties surrounding regulatory changes.
Huobi also made a plan to launch an exchange in Korea. The company recently partnered with Japan’s SBI Holdings to begin operations in Japan. According to Nikkei, SBI will buy a 10% stake in Huobi’s South Korean subsidiary. In November of last year, Huobi’s CEO, Li Lin, was quoted by the Korea Times saying:
We are preparing to establish an exchange in Korea to compete with Bithumb.
Bithumb has long been the largest crypto exchange in South Korea by volume. However, recently, newcomer Upbit has been reporting trading volumes that exceed those of Bithumb, as news.Bitcoin.com reported. Upbit is backed by Kakao Corporation, which owns the country’s largest chat app called Kakao Talk.
In December, the Korean regulators made several announcements regarding cryptocurrency regulation, as news.Bitcoin.com previously reported. Most recent announcements concern the anonymous trading of cryptocurrencies. The government is creating a real-name identification system and is expected to end the practice of anonymous trading by January 20. Currently, this practice is possible through the use of “virtual accounts.” So far, all major crypto platforms in the country have complied with all regulatory measures announced and revised their terms of service accordingly.
<figure id="attachment_96611" style="width: 800px" class="wp-caption aligncenter">
<figcaption class="wp-caption-text">A meeting of South Korean regulators.</figcaption>
In addition to prohibiting the issuance of new virtual accounts, according to Ajnews, the government has decided:
A new entry into the virtual currency trading market will be blocked until the realization of the so-called ‘virtual money real name system’ that can confirm the identity of the account owner on the 20th of this month.
Do you think Chinese exchanges will do well in South Korea? Do you think the government will make it more difficult for them to enter the market? Let us know in the comments section below.
Images courtesy of Shutterstock and Etoday.
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