Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Fates of Bithumb, Coinone, Korbit still hang in balance
Bithumb Korea's customer service center in Seoul / Yonhap
By Park Jae-hyuk
New FSC chief skeptical about value of cryptocurrencies
By Park Jae-hyuk
The survival of Bithumb, Coinone and Korbit is still uncertain, as they have yet to satisfy the requirements for stable operation under the toughened regulations that will take effect in a month, data compiled by the government showed Wednesday.
Along with Upbit, they are among the nation's four cryptocurrency exchanges that have been provided with real-name accounts from domestic commercial banks.
However, the government data showed that Upbit is still the country's only cryptocurrency exchange that has filed a report on its business details to the Korea Financial Intelligence Unit (FIU).
According to the Act on Reporting and Use of Certain Financial Transaction Information, cryptocurrency exchanges with information security management system (ISMS) certification must submit such reports to the FIU by Sept. 24, after getting confirmation from their affiliated banks regarding provision of real-name accounts.
The government data showed that 21 exchanges here, including Bithumb, Coinone and Korbit, acquired ISMS certification, but they are facing difficulties in getting confirmation from their affiliated banks, as the banks seek to avoid taking responsibility for any possible misconduct at their affiliated exchanges.
In contrast to K bank that agreed to continue its partnership with Upbit, NongHyup Bank has remained reluctant to issue its confirmation to its affiliated exchanges, Bithumb and Coinone. Korbit has yet to receive confirmation from its affiliated bank, Shinhan. Unless the exchanges secure real-name accounts, their users will not be able to trade their virtual assets with actual currencies.
The situation is worse for 42 minor exchanges here, as they have yet to acquire the ISMS certification. Among them, 24 exchanges have still not applied for the certification.
“Customers of exchanges that did not apply for the ISMS certification are feared to face losses from their potential shutdowns,” the government said. “They should take preemptive measures, such as withdrawing their deposits and virtual assets from the exchanges.”
The government also said it has inspected or arrested 520 people on suspicion of fraud using virtual assets, as part of an ongoing five-month special crackdown that started in April.
Lawmakers from the main opposition People Power Party listen to ProBit CEO Do Hyun-su, left, about the operation of the cryptocurrency exchange's “Cold Wallet Room” designed to store electronic wallets of users safely, during their visit to ProBit's headquarters in Seoul, Wednesday. Yonhap
The announcement was made amid the growing concerns over Upbit monopolizing the local market.
A few hours before the announcement, lawmakers from the main opposition People Power Party (PPP) visited the headquarters of ProBit cryptocurrency exchange to listen to the opinions of exchange operators about the forthcoming new regulations. The country's cryptocurrency exchange operators claimed that they were not allowed to have enough time to prepare for the new regulations.
The lawmakers have urged the government to delay the enforcement of the new regulations for six months, although the ruling Democratic Party of Korea (DPK) and the financial authorities have remained skeptical about this.
“The government's attitude is raising doubts about its willingness to protect 6.6 million investors,” Rep. Yun Jae-ok of the PPP, who was appointed the next chairman of the National Assembly's National Policy Committee, said. “Whether it has any plan to protect exchange operators is also questionable.”
Financial Services Commission Chairman nominee Koh Seung-beom / Yonhap
Financial Services Commission (FSC) Chairman nominee Koh Seung-beom, however, supported the government's stance on virtual assets in his written answers given Wednesday to the National Policy Committee lawmakers, who will participate in his confirmation hearing slated for Friday.
This is the first time for him to disclose his official stance on virtual assets, since he wrote in his column eight years ago that bitcoin cannot be an exception for the stability of the financial system and the protection of financial consumers
Koh advised investors to be careful about trading virtual assets that are volatile and speculative. He noted that the government has continuously warned that no one guarantees the value of cryptocurrencies.
The nominee has also remained skeptical about delaying the enforcement of the tougher regulations on cryptocurrency exchanges. He emphasized the necessity of measures to minimize losses of investors from shutdowns and illegal acts of exchange operators.
“They have been allowed to have enough time, so it is appropriate for the authorities to maintain its initial plan to prevent additional damages from delayed shutdowns of undeclared exchange operators,” he said.