What Is the Fate of the Four Major Cryptocurrency Exchanges? ... This Week Marks a Turning Point for Real-Name Account Contracts (Comprehensive)

NH Nonghyup and Shinhan Bank to Decide on Contract Renewal with Bithumb, Coinone, and Korbit

[Asia Economy Reporter Park Sun-mi] The decision on whether three cryptocurrency exchanges?Bithumb, Coinone, and Korbit?will secure real-name bank deposit and withdrawal accounts is expected to be made as early as this week. Including Upbit, which has already completed the re-contracting for real-name accounts with K Bank, it is anticipated that only about four major cryptocurrency exchanges will meet both reporting requirements and be able to operate normally as cryptocurrency exchanges.

According to the financial sector on the 6th, NH Nonghyup Bank plans to decide by the 8th whether to renew real-name deposit and withdrawal account contracts with cryptocurrency exchanges Bithumb and Coinone. Apart from these two whose contracts are about to expire, no new exchanges are confirmed to be under contract review. Shinhan Bank is also expected to decide on the renewal of real-name account contracts with Korbit as early as this week. The due diligence was completed last month, and the final review stage is currently underway.

This week marks a turning point to gauge which exchanges fulfill both requirements necessary for cryptocurrency exchange operator registration: obtaining Information Security Management System (ISMS) certification and securing real-name bank accounts. The deadline for cryptocurrency business registration under the Act on Reporting and Using Specified Financial Transaction Information is the 24th of this month. Due to the Chuseok holiday, the effective registration period is only about two weeks. Considering the preparation needed for registration, it is stable to meet all requirements within this week.

Industry insiders believe that the banking sector is reluctant to add new real-name account contracts with cryptocurrency exchanges due to the significant liability risks in case of problems, so only about four exchanges are expected to continue operating as usual. Seventeen exchanges that have obtained ISMS certification but have not secured real-name accounts are expected to register as operators conducting only coin-to-coin trading without Korean won transactions and will attempt to secure real-name accounts in the future.

On the other hand, exchanges that have not yet obtained ISMS certification face inevitable closure. According to the Financial Services Commission, as of the end of July, among 42 exchanges without ISMS certification, only 18 are in the application process. Twenty-four exchanges have not even applied for ISMS certification, and since it typically takes 3 to 6 months after application to obtain ISMS certification, it is highly unlikely they will secure certification before September 24.

Financial Authorities Prepare for Mass Closure of Cryptocurrency Exchanges... Guidance on Necessary Measures Provided

According to the Financial Supervisory Service guidelines, cryptocurrency exchanges must notify their members at least 7 days in advance when situations arise requiring partial or full business closure, such as decisions to cease operations, non-registration decisions, or receipt of non-acceptance notices.

Considering the registration deadline of the 24th, this means customers must be informed about closures or suspension of trading by the 17th. Notifications must be implemented immediately once the business closure is confirmed. Following the closure notice, new deposits of funds and cryptocurrencies will be suspended. New member registrations will not be accepted, and necessary measures such as deleting existing member information must be carried out. However, to minimize consumer damage due to the wave of cryptocurrency exchange closures, exchanges must support withdrawals of deposits and coins through dedicated channels for at least 30 days after the closure date. Users can also transfer their existing coins to other exchanges.

Illegal operators conducting business without registration face fines up to 50 million KRW or imprisonment up to 5 years. The Financial Services Commission’s Financial Intelligence Unit and the Financial Supervisory Service held a briefing for cryptocurrency exchanges on the same day, urging them to prepare for registration and take precautions to minimize user damage.

A financial authority official advised, "If cryptocurrency exchanges do not register with the Financial Intelligence Unit by the 24th, they will have no choice but to close or suspend operations. Users dealing with virtual asset operators who have not applied for ISMS certification should take proactive measures such as withdrawing deposits and coins in advance to avoid potential damages from closures or suspensions."

This content was produced with the assistance of AI translation services.