In breaking news out of Asia, 12 Korean crypto exchanges have just passed self-regulatory checks, but have admitted to a few flaws. Over the past 6-months, the Korean crypto industry has been akin to a soap opera unfolding, but in recent months, regulations and checks are trying to get the industry back in line.
Korean crypto exchanges, Bithumb, Huobi, OKCoin, and Coinone, have recently met self-regulatory requirements for cybersecurity, but many have largely scrapped through the tests with a big gap in their results.
Korean crypto exchanges just making the grade
Although the news has recently broken that 12 crypto exchanges in Korea have passed the standard checks, it seems that a few of them barely made it to the other side, said the Korea Blockchain Association (KBA) in a statement on Wednesday. Although the exchanges made it through the general requirements with little to no problems, including the recently hacked Bithumb, there were large differences between the passing levels of the trading platforms in question.
The general standards included some anti-money laundering (AML) provisions, issues regarding the adoption of cold wallets and also the total of minimum assets required. Although there was news of some security issues with some of the exchanges, the KBA is keeping tight-lipped on the details so they cannot be used against the Korean crypto exchanges by cyber-hackers.
The head-honcho of the regulatory body, Jhun Ha-Jin, reported during a press conference that there was a “huge” gap in how the companies handled cybersecurity threats. Even those exchanges who met the general standards cannot assure immunity from hacks, said Jhun Ha-Jin, talking to the local newspaper, the Korean Herald.
Passing the voluntary testing
The testing procedure included interviews and inspections from independent experts, who tested 14 of the Korean crypto exchanges that are members of the KBA. Although 12 passed the testing, two of the companies, Sunny7 and Komid, quitted the inspection halfway through.
Notable exchanges that made the grade and passed the tests include Bithumb, OKCoin Korea, Huobi Korea, Upbit, Coinone, Dexko, Hanbitco, Neoframe, Gopax, Cpdax, Coinzest, and Korbit.
The KBA checks started in May and had taken two months to complete. Ironically, the testing took place during June, when two exchanges, Bithumb and Coinrail, were hacked to the tune of USD 31 million and USD 40 million respectively, which has been making big news in the marketplace.
It was only last Tuesday that the new and revised anti-money laundering bank regulations were enforced on the Korean crypto industry by the nation’s Financial Services Commission (FSC). It is now law that banks and other financial companies carry out due diligence on crypto exchanges, regarding non-client accounts, which means they need to share information regarding oversees digital trading platforms with its FSC. This could then result in halting suspicious crypto transactions.
With these new regulations in place and a new classification system for the Korean blockchain industry in line with G20, who are seeking a common approach to virtual assets, it is a difficult time for Korean crypto exchanges which are now regulated up to their eyeballs.
I am very experienced writer/blogger who has been an active member of the cryptocurrency community for several years. I have experience writing for crypto news sites and proactively been involved in the startup of other ICO and crypto ventures over the course of the past four years.