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• South Korea’s top financial regulator, the Financial Services Commission (FSC), has launched a „comprehensive inspection“ of the nation’s crypto exchanges that do not have licenses to trade fiat KRW.
• FSC specifically wants to probe the 20 trading platforms and focus on anti-money laundering protocols.
• GDAC is the first exchange being inspected by the FSC, as it was involved in a controversial delisting of Wemix token last year.

South Korea Launches Crypto Trading Platform Probe

South Korea’s top financial regulator, the Financial Services Commission (FSC), has begun a „comprehensive inspection“ of the nation’s crypto exchanges that do not have licenses to trade fiat KRW. The FSC is investigating 20 trading platforms and plans to focus on anti-money laundering protocols.

Which Exchanges Are Involved?

Under South Korean law, exchanges can offer crypto-to-crypto trading services provided they meet certain criteria. To obtain fiat-trading licenses, however, they must form partnerships with commercial banks. These banks must provide all exchange users with real name-, social security number-verified accounts linked to their crypto wallets.The “big four” crypto exchanges – Upbit, Bithumb, Korbit and Coinone – have had such banking partnerships in place for several years. The remaining 21 South Korean exchanges have been left to pursue banking deals with domestic banks; only one – Gopax – has been successful so far.

FSC Probes GDAC Exchange First

The FSC stated that it would begin its probe with GDAC; this is one of the exchanges involved last year in the controversial delisting of Wemix token – a coin created by domestic gaming giant WeMade – which left observers stunned when it announced that it would list Wemix just two hours after “big four” announced their removals from their platforms. Some insiders believe that the FSC has decided to start its probe at GDAC due to this reason; others appear to believe that authorities may have started its investigation ahead of a possible GDAC application to rejoin KRW market which suggests some behind-the scenes deal could have been struck with a bank.

Real Name Verification Rule for All Exchanges

For all South Korean exchanges wishing to obtain licenses for fiat markets must partner up with commercial banks who must provide users real name-, social security number verified accounts linked up with their crypto wallets before they can start offering services legally on these markets according tot he law set by FSC regulations in place since 2019.

Conclusion

In conclusion, South Korean’s top financial regulator, Financial Services Commission (FSC) has launched an investigation into twenty cryptocurrency trading platforms without any license from KRW market and will be focusing mostly on anti money laundering protocols enforced by law in order for these platforms adhere too before beginning operations legally in accordance with existing rules set out by them officially since 2019..