Low trading volumes jeopardize the continued existence of the vast majority of South Korean cryptocurrency exchanges, as well as forcing local startups to look for ways to list their coins on foreign sites, according to Business Korea .
In particular, the publication draws attention to the fact that only five South Korean sites are today in the first hundred exchanges in terms of trading volume.
“It is not an exaggeration to say that due to the low volume of transactions, 97% of local exchanges are on the verge of bankruptcy, ” the article says.
Despite the fact that the publication does not cite data that supported its statement, at least one South Korean exchange – Coinnest – has already closed this year. However, the circumstances of the incident are still in question. So, in an interview with CoinDesk Korea , Coinnest representatives said that the closure of the exchange was "a natural result of a decrease in trading volumes", and also mentioned "regulatory problems and business solutions."
At the same time, as BlockchainJournal wrote , it is possible that Coinnest could take such a step because of the prosecution of exchange leaders who were accused of receiving a bribe in exchange for cryptocurrency listing last year.
Be that as it may, one cannot argue with the fact of low trading volumes on South Korean exchanges. And it is precisely this factor that is supposed to be forcing an increasing number of local cryptocurrency startups to be hosted on foreign platforms. And the latter, apparently, do not intend to miss this opportunity.
So, according to the publication, Binance Labs and the BW.com exchange show particular interest in South Korean projects. The first is actively attracting local blockchain startups to its accelerator, while the second has already flipped coins from projects such as Ziktalk, Storichain, Payexpress and Sigma Chain, and intends to open fiat markets in pairs with the South Korean won by the end of the month.
Other “difficult market conditions for local cryptocurrency exchanges” are also called, supposedly forcing projects to look for listing opportunities abroad, including the big problems with making deposits and withdrawing funds in fiat that investors face.
In addition, 200 small exchanges cannot open verified virtual accounts, which deprives investors of any protection.
According to the publication, the current landscape of the cryptocurrency market in South Korea is noticeably different from the picture that could be observed in late 2017 and early 2018. For example, in December 2017, this Asian country accounted for about 20% of the global trading volume of bitcoin, and cryptomania reached such a high level that Prime Minister Lee Nak Yong even called it “a serious pathological phenomenon.”
Earlier in August, it became known that the South Korean authorities will tighten control over local cryptocurrency exchanges, expanding the powers of the Financial Services Commission (FSC). In particular, the FSC unit, previously engaged in the preparation of recommendations for working with exchanges for banks, will now directly control trading platforms. Also, a licensing system for exchanges will be introduced in the country in accordance with the recommendations of the Financial Action Task Force on Money Laundering (FATF).
Subscribe to BlockchainJournal news in Telegram: BlockchainJournal Live – the entire news feed, BlockchainJournal – the most important news and polls.
BlockchainJournal.news
BlockchainJournal.news
