A number of new cryptocurrency exchanges are launching in South Korea despite being unable to provide full service due to regulatory challenges. Since the Korean government enforced the real-name system on cryptocurrency accounts, banks have only been providing fiat deposit services to the country’s four largest crypto exchanges.
Exchanges Undeterred by Regulations
A number of new cryptocurrency exchanges are opening in South Korea despite regulatory uncertainty and the inability to accept fiat deposits. The challenge comes from the new system, enforced on January 30, which requires cryptocurrency traders to use real-name accounts to deposit money for trading at crypto exchanges.
While six major banks have the ability to service cryptocurrency accounts, they “have been converting only existing virtual accounts to real-name accounts for four large cryptocurrency exchanges” – Bithumb, Upbit, Coinone, and Korbit. The Investor elaborated:
The banks have also been refusing to issue new real-name accounts for other cryptocurrency exchanges, citing uncertainties and security concerns.
New crypto exchange Zeniex announced last week that it will begin service on February 12. The company explained that its launch “has been delayed by a month due to the latest regulations designed by the Korean government to cool the overheated cryptocurrency market,” the news outlet reported. Initially, the exchange will support bitcoin, bitcoin cash, ether, ethereum classic, litecoin, quantum, eos, bytom, and 0x.
Zeniex CEO Choi Kyung-joon was quoted detailing:
It’s currently difficult to provide our complete services due to delays in issuing real-name bank accounts for trading…Despite these circumstances, we have decided to go ahead with the launch to service our customers who have been waiting for our opening.
With the bank account problem, traders “can only buy and sell cryptocurrencies with bitcoins because major banks are putting off confirming and issuing real-name bank accounts,” the publication added.
Another crypto exchange named Dexko announced on Friday that it will start accepting pre-registration of users with the aim to launch its cryptocurrency exchange on March 15, the Investor also reported. Initially, the exchange will support 10 cryptocurrencies including bitcoin, ether, bitcoin cash, litecoin, and ripple. Pre-registration runs from February 5 to 25, according to the company’s website.
The firm will exempt trading fees for a month for pre-registered users at launch, the news outlet detailed. Kim Yong-ho, the CEO of Korea Digital Exchange which operates the exchange, commented:
We worked hard to remove defects and minimize customer inconvenience by conducting in-depth analysis on other exchanges…Dexko has completed all the legal and systematic requirements and is preparing to introduce won-based trading soon.
Two Chinese exchanges are also planning to enter the South Korean market. Earlier this month, Okcoin reportedly reached a final investment agreement with South Korean game company NHN Entertainment Corp, which was previously part of Naver. “Under the agreement, Okcoin will provide its own trading system and NHN Entertainment will operate a domestic server and respond to customers,” Business Korea described. The company plans to trade more than 60 cryptocurrencies against the Korean won.
Huobi is also planning to enter the Korean market in the first quarter of this year, the publication noted. Before the Chinese government closed down all cryptocurrency trading last year, the two exchanges were among the very largest in the world as measured by volume.
What do you think of these new crypto exchanges launching in Korea? Let us know in the comments section below.
Images courtesy of Shutterstock, IHS, Zeniex, and Dexko.
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