29 S. Korean crypto exchanges are now ISMS-certified
The wait is over! After flagging the looming regulatory non-compliance by 40 South Korean cryptocurrency exchanges (CEXs). We reported that 28 CEXs have fulfilled preliminary compliance requirements. Now, the long-awaited clarity in regards to the regulatory compliance by South Korean CEXs has arrived.
Thoroughly complying with the Korea FIU’s (KoFIU) September 24 (2021) deadline, only four CEXs can now offer trading in Korean won. Operational continuity is granted to 29 (of 66) CEXs upon them satisfactorily complying with the regulatory stipulations. These 29 CEXs represent 99.9% of the market (as of Sept. 21, 2021), reports FSC.
The Act on Reporting and Using Specified Financial Transaction Information (ARUSFTI) mandates CEXs to secure Information Security Management System (ISMS) certification. Following this, submission of a report to the Financial Intelligence Unit (FIU) was required, as well (by Sept. 24).
Per the Financial Services Commission’s (FSC) official Sept. 26 press release: “42 VASPs have filed registration reports with the KoFIU.” VASP stands for virtual asset service providers. These 42 VASPs also include 29 CEXs or (virtual asset trading platforms). The said list also includes 13 virtual asset wallet service providers.
The KoFIU and the Financial Supervisory Service (FSS) shall assess registration reports to finally decide if to accept the registrations in 3 months. That leaves 37 CEXs failing to avail the ISMS certifications, subjected to “business closure.” While 36 CEX’s have already “terminated their business operations,” one CEX is a fresh one that hasn’t even begun operating. “Orderly exit of unqualified VASPs” is being worked-out by the FSC. The FSC has also instructed the CEXs to return to customers their invested funds in 30 days.