So, it turns out South Korea’s financial authorities will NOT be extending the grace period for cryptocurrency exchanges to register themselves with the government.
Or so said the Financial Supervisory Service (FSS) on Friday.
That means all cryptocurrency exchanges in operation prior to March 25, 2021 will need to register with the Korea Financial Intelligence Unit (FIU) by Sept. 24.
To register with the FIU, exchanges that allow locals to deposit and withdraw legal tender — i.e., the Korean won — must receive real-name accounts from banks.
Exchanges that deal ONLY in cryptocurrency, however, can register just as long as they’ve gotten an Information Security Management System (ISMS) certification.
Those that fail to get registered will be forced to close from Sept. 25.
To underscore their point, the FSS reminded exchanges that if they are caught operating after Sept. 24 without a license, they face up to five years in jail or KRW 50 million in fines.
If you’re keeping score at home, not a single cryptocurrency exchange has registered with the FIU yet.
And it’s not just local exchanges that need to apply. An FIU official told the Hankyung and Coindesk Korea earlier this month that overseas exchanges such as Binance will need to register with the FIU if they want to provide services to Koreans.
If they fail to register, they must cease cryptocurrency services for Koreans or face legal charges.
Coindesk Korea noted that while Binance doesn’t not support Korean won, it does have a Korean language site and a Korean language Telegram channel.
Anyway, the FSS’s statement on Friday was a refutation of an article that appeared the day before in the Korean language daily Hankook Ilbo claiming that the financial authorities were preparing a rescue plan for investors with crypto at exchanges that will be shut down after the September deadline, and that said plan was very possibly an extended grace period that would allow investors to move their coins or cash elsewhere.
Well, the FSS says an extended grace period won’t happen. Which also suggests that investors with the assets at exchanges likely to shut their doors may wish to begin contemplating the future.
Last year, South Korea’s parliament passed a revision to the Financial Transactions Reporting Act (FTRA) to bring the country into compliance with guidelines set by the Financial Action Task Force (FATF).
The revised law went into effect from March 25 of this year, but exchanges were given six months to register with the FIU.