S Korean Exchanges ‘Could Downsize’ as Gov’t Regulations Bite

South Korean cryptocurrency exchanges could be forced to downsize or start looking abroad for business expansion opportunities as government regulations take their toll on the country’s crypto businesses and investors, per industry sources.

According to media outlet Money Today, a number of South Korean cryptocurrency holders are transferring their funds to overseas exchanges to avoid having to deal with South Korean banks, most of which now follow government guidelines that require Korean won withdrawals to be made through real-name, social security number-verified bank accounts.
The guidelines require that all exchanges agree six-month contracts with a South Korean bank for customer real-name deposits and withdrawals, the terms of which are subject to change upon each renewal. Banks are required to monitor these accounts for potentially suspicious activates and report their findings to the government.

As trading continues to decline in the country, banks that had invested in cryptocurrency exchange-related infrastructure are thus finding themselves “spending more on risk management” as a result of the government’s regulations – and finding dealing with exchanges a lot less profitable than they had initially expected.

The media outlet quotes an anonymous employee at a South Korean cryptocurrency exchange as saying, “Exchange profits are down 90% on what they were when the market was at its peak [in December 2017-January 2018]. The exchange industry as a whole invested a huge amount of money in technology, management and security systems in anticipation of market growth, but instead, many are now losing money and may eventually have to look to reducing the size of their workforces.”

Market leader Bithumb recently sold a controlling share in the company to a Singapore-based enterprise, plans to launch operations in Hong Kong before the month’s end and also intends to expand its activities to Singapore and Europe in the near future. Its closest rivals are also looking to expand overseas, with Upbit set to open a Singapore branch and Coinone opening an exchange in Indonesia in August this year.

However, the same media outlet also quotes a bank official as stating that South Korean exchanges’ overseas expansion plans “would do nothing” to improve the lot of domestic customers, and thus would do little to help exchanges’ causes when it came to striking deals with banks – as required by the government’s banking guidelines.

Kim Hyung-joong, a professor at Korea University, told Money Today, “Investors are becoming increasingly anxious […] The government should consider the possibility of fostering the cryptocurrency sector by introducing new [and beneficial] crypto-specific legislation.”


Source
Author: Tim Alper
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Rich South Koreans Reluctant To Buy More Crypto

In South Korea, the richer you are, the more likely you are to have cryptocurrency holdings, say the authors of a new survey. However, it seems that the rich’s confidence in Bitcoin and altcoins has taken a tumble.

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Per the findings of the KB Financial Group – a financial services mammoth that encompasses banking giant Kookmin Bank – richer South Koreans are more likely to have bought cryptocurrencies in the past, but are becoming reluctant to re-enter the market.

The KB Financial Group’s Korean Wealth Report found that some 24% of richer South Korean have purchased cryptocurrencies at some point, compared to 14% of less-affluent citizens.

However, the survey found that only 2% of wealthier South Koreans intend to make cryptocurrency purchases in the future.

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Furthermore, among the country’s most affluent capitalists (those with financial assets worth over USD 4.5 million), investors were twice as likely to have cryptocurrency holdings than those with less capital. This group also expressed a little more confidence in the market, with 5% saying they would consider re-investing in cryptocurrencies.

The survey also found that South Korean investors were almost half as likely to buy cryptocurrencies as investors elsewhere in Asia. Per the survey, 29% of South Korean respondents said they intended to buy cryptocurrencies at some point – compared to 52% of those living elsewhere on the continent.

Confidence in the market took a hit in South Korea earlier this year after a proposed government crackdown sent currencies into a tailspin – as well as a series of hacks on many of the country’s leading exchange platforms.


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Source
Author: Tim Alper
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Crypto Exchange Bithumb Halts Withdrawals Amid $31 Million Hack

Bithumb, one of the largest cryptocurrency exchanges in South Korea by trading volume, is halting asset deposit and withdrawal services after hackers stole 35 billion won (or $31 million) from the platform.


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The company said in an announcement today that the hack happened between late Tuesday night until early Wednesday morning Korean time. Though Bithumb has yet to disclose which cryptocurrency or in what amount had been damaged, it said in the announcement that the loss will be covered by the platform.

Meanwhile, the company said other assets have been moved to a cold wallet that stores cryptocurrencies in an offline environment that is not accessible through the internet. As such, Bithumb said investors should “immediately discontinue depositing cryptocurrencies until further notice.”


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As of press time, Bithumb is seeing over $300 million 24-hour trading volume on its platform, making it currently the sixth largest exchange in the world, data from CoinMarketCap shows.

The hack marks the second incident in less than two weeks in South Korea. As previously reported by CoinDesk, Coinrail, a smaller cryptocurrency exchange in the country also reported that it was hacked on June 10.

Though the platform did not disclose the amount of the damage, other sources suggested at the time that $40 million worth of cryptocurrencies could be at risk.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Wolfie Zhao
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