Many crypto firms in South Korea are faced with the challenge of not having the capacity to withstand the new regulations enacted by the Country’s Financial Service Commission (FSC). The enforcement of the new policy places the smaller crypto industries on the brink of being closed, as a result, some firms are planning to charge the government for evading its primary duties.
The recent policy made it imperative that each firm must be duly registered with a true identity in a Korean bank on or before 24th September but the drawback is that banks are avoiding scrutinization for smaller firms. According to Business Korea news, these firms are planning to charge the government for not living up to its duty. The new policy noted that domestic banks are to deny crypto services to any firm that has no real identity or to report fraudulent actions.
According to an industry staff, most of the scrutinization duty has been left In the control of banks instead of the financial regulators and the government. Banks have been compelled to assume the position of giving real-identity accounts. The government is likely to face pressure from many angles since many commercial lenders and the country’s Federation of Banks have called on the FSC against the recent policies
According to Business Korea, an unrevealed number of firms are speculating suing the financial authorities and the government for the renunciation of their duty in supervising the crypto market.
Some banks are reportedly involved with assessing the four big crypto firms in the industry but denied similar services to smaller companies. An undisclosed crypto agent noted that banks are currently not willing to start the validation processes even when they have no tangible reason for the delay. According to the agent, many firms are not giving an opportunity to get verified, therefore the FSC needs to put things in place.
Previously, 20 firms in Korea had a private discussion with the Financial Intelligence Unit of the FSC, expressing their worries regarding challenges to fulfilling what is needed to obtain an account with a true identity and other difficulties. Currently, only the four large firms had the privilege of meeting up with the new law.
Also, the financial requirements needed for such partnerships with banks are highly expensive and cannot be afforded by smaller firms. Based on estimates, the new rules would possibly affect approximately sixty crypto firms in the country.
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