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Media: 97% of the cryptocurrency exchanges of South Korea are on the verge of bankruptcy
Low trade volumes jeopardize the further existence of the vast majority of South Korean cryptocurrency exchanges, and also force local startups to look for the possibilities of listing their coins on foreign sites, says Business Korea.
In particular, the publication draws attention to the fact that only five South Korean sites are included today in the first hundred exchanges in terms of trading volumes.
“It will not be an exaggeration to say that due to a low volume of transactions 97% of local exchanges are on the verge of bankruptcy”, – The material says.
Despite the fact that the publication does not quote the data that reinforced its approval, at least one South Korean exchange – Coinnest – this year has already closed. However, the circumstances of the incident still remain in question. So, in an interview with Coindesk Korea, Coinnest representatives said that the closure of the exchange was a “natural result of a decrease in trade volumes”, and also mentioned “regulatory problems and business solutions”.
At the same time, as Forklog wrote, it is possible that Coinnest could go to such a step due to the court pursuit of the leaders of the exchange, who were accused of receiving a bribe in exchange for leaflet listing last year.
Be that as it may, with the fact of low trade volumes on South Korean exchanges, you do not have to argue. And it is this factor that is supposed to force an increasing https://gagarin.news/news/singapore-based-crypto-exchange-bitget-increases-staff-despite-the-bear-market/ number of local cryptocurrency startups to be placed on foreign platforms. And the latter, apparently, do not intend to miss this opportunity.
So, according to the publication, Binance Labs and BW Exchange show special interest in South Korean projects.Com. The first is actively attracting local blockchain startups to their accelerator, while the second has already flooded coins of such projects as Ziktalk, Storichain, Payexpress and Sigma Chain, and intends to open fiat markets in pairs with a South Korean volume before the end.
Other “difficult market conditions for local cryptocurrency exchanges” are also called, presumably forcing projects to look for listing opportunities abroad, including big problems when making deposits and withdrawing funds in fiat, which are faced with investors.
In addition, 200 small exchanges cannot open verified virtual accounts, which deprives investors of any protection.
According to the publication, today’s landscape of the cryptocurrency market in South Korea is noticeably different from the picture that could be observed at the end of 2017 and early 2018. For example, in December 2017, this Asian country accounted for about 20% of the global volume of Bitcoin trading, and cryptomania reached such a high level that Prime Minister Lee Nak Yon even called it a “serious pathological phenomenon”.
Earlier in August, it became known that the authorities of South Korea will strengthen control over local cryptocurrency exchanges, expanding the powers of the financial services commission (FSC). In particular, the FSC division, previously compiled for banks, recommendations on working with exchanges will now directly control trading platforms. Also in the country will be introduced a system of licensing of exchanges corresponding to the recommendations of the group for the development of financial measures to combat money laundering (FATF).
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