In recent times, there has been a lot of focus on the cryptocurrency market. Many governments are skeptical about the authenticity of these digital currencies. In fact, some governments like India are already proposing to ban it completely. The Central Bank of Nigeria prohibits commercial banks in the countries from attending to crypto-related transactions. In South Korea, there is bad news for cryptocurrency enthusiasts. The cryptocurrency exchange, OKEx Korea officially issued a statement that it will cease operations on April 7.
In a notice issued on Tuesday, the exchange stated that customers must withdraw their fiat and cryptocurrency holdings before the deadline. After that, it will not bear any loss from the customer. Korea OKEx will accept withdrawal applications around the clock before 6 pm local time on April 7th. If the withdrawal request is less than the predetermined minimum amount, it will not be accepted.
OKEx is closing down probably due to new government laws
The company did not specify the reason for the closure in the statement, but it is likely due to a new law that will take effect in South Korea on Thursday. According to the revised “Financial Transaction Reporting Act”, virtual asset service providers must undergo compliance checks and verify the identity of their customers. They must also submit suspicious transaction reports to the Korea Financial Intelligence Agency and report to the Financial Services Commission.
The Financial Transaction Reporting Act provides a 6-month grace period for companies engaged in cryptocurrency-related services. Within this grace period, these companies will have to complete the rectification. However, OKEx Korea Exchange clearly states that it will be difficult to do this.
Due to a policy change, OKEx South Korea announced on March 18 that it will stop trading. However, all withdrawal businesses will proceed normally before the revised legislation takes effect on March 25. OKEx Korea was launched in August 2019. According to data from CoinMarketCap, the daily trading volume of OKEx Korea reached $1.8 million, while the global trading volume is $6 billion.
The South Korean branch of Binance, the world’s largest crypto exchange, also closed its business in South Korea in early 2021. The company attributed this move to declining liquidity and low trading volume in major trading pairs.
According to an Austrian agency, there should be a proper check on cryptocurrency transactions. The agency claims that about 60% of financial crimes in Austria have connections to cryptocurrencies. This is why many governments are now putting stringent laws on cryptocurrency transactions.