In wake of the regulatory crackdown, South Korean crypto exchange, Bithumb has banned all its employees from trading cryptocurrencies on its platform. Besides, the exchange noted that it seeks to “strengthen internal regulations” to enhance transaction transparency.
These restrictions will come into play starting this month, as per the official notice released Friday, July 2. As part of this measure, the Bithumb staff members have already received written statements for account withdrawals over the last month.
Bithumb CEO, Back Young Heo, also talked about the previous policy that prohibits the leakage of undisclosed information. The policy which aims to curb unfair trade practices and market manipulation is already under implementation.
To further make sure that Bithumb employees follow this new policy, the exchange aims to completely ban employee trading accounts. Additionally, the exchange aims to implement a real-time monitoring system for self-audits along with an internal reporting system.
The recent news comes amid strict regulatory measures initiated this year by South Korea. The topmost regulator – Financial Services Commission (FSC) – has increased oversight on local crypto exchanges and firms. As a result, other crypto exchanges are likely to follow similar policies. The new regulatory framework makes it mandatory for local exchanges to adhere to or cease their operations from South Korea’s crypto landscape.
FSC’s Rising Regulatory Oversight
Earlier this year in March 2021, the FSC amended its financial reporting rules. These rules mandate exchanges to submit regular transaction reports with the Financial Intelligence Unit. Besides, it requires exchanges to have real-name accounts for its customers at Korean banks.
The South Korean government has given crypto exchanges a deadline to register with the local financial authorities by September 2021. Besides, over the last 12 months, regulatory officials have been amending multiple rules to ensure the right compliance in place. These rules also introduce a new taxation law along with a ban on privacy coins.
However, local crypto exchanges have lashed out at South Korean regulators for this excessive regulatory pressure. The exchanges have also been considering suing the government for its failure to take responsibility for this regulatory measure.
With a massive scale of crypto trading activity in the country, South Korean regulators have initiated unprecedented measures. However, despite these new regulatory measures, there’s not a significant drop in the excitement of crypto investors.
As per the recent report from Asian Nikkei, South Korean exchanges have started the crackdown on ‘kimchi coins’ citing regulatory pressure. Topmost crypto exchanges like Upbit have started flagging some of the crypto coins as “coins to watch”. Upbit said that this is because “their overall evaluation does not meet internal standards, and measures to protect investors are necessary”.