Korean cryptocurrency exchanges were banned from withdrawing cryptocurrency to foreign trading platforms that refused to register in the country.
Korean cryptocurrency exchanges have begun to impose restrictions on foreign trading platforms. The first innovation has already been introduced to the Upbit exchange.
According to the press release, starting from August 28, Upbit will prohibit the withdrawal of cryptocurrencies to wallet addresses associated with foreign platforms, including Poloniex and KuCoin. The full list of sub-sanctioned exchanges is as follows: KuCoin, MEXC, Phemex, XT.com , Bitrue, ZB.com , Bitglobal, CoinW, CoinEx, AAX, ZoomEx, Poloniex, BTCEX, BTCC (ex. BTC China), DigiFinex and Pionex.
Earlier, the Financial Services Commission (FSC) of South Korea imposed sanctions against the above exchanges due to their lack of a license to provide services in the region. Moreover, the Korean authorities intend to report violations of cryptocurrency exchanges to the countries where these platforms are based. It is expected that in this way they will be able to isolate illegal crypto exchanges.
Back in 2021, South Korea obliged cryptocurrency exchanges to be certified for compliance with information security requirements. Since then, more than half of the local crypto exchanges have ceased their activities.
According to the government, 35 cryptocurrency platforms are currently registered in South Korea. These include Upbit, Bithumb, Coinone, Korbit and Gopax. According to Bloomberg, they account for more than 99% of the trading volume of the domestic market. In general, following the results of regulatory tightening, the volume of trading on the local market fell by 140%.