- South Korea’s Financial Supervisory Service (FSS) has convened an urgent meeting with major crypto exchanges to discuss escalating deposit fees and compliance with recent regulations.
- This intervention targets top exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax amid rising concerns over competitive fairness and user protection.
- A significant point of contention was Bithumb’s proposed 4% deposit fee, which has led to regulatory scrutiny under the new Virtual Asset User Protection Act.
Discover the latest regulatory moves in South Korea’s crypto market as the FSS tackles rising deposit fees and enhances compliance oversight among major exchanges.
South Korea’s FSS Ramps Up Scrutiny on Crypto Exchanges
In response to recent crypto regulations, South Korea’s Financial Supervisory Service (FSS) has called a meeting with the country’s leading crypto exchanges. This gathering, held on July 24, 2024, aims to address the dramatic increase in deposit usage fees implemented by exchanges following the Virtual Asset User Protection Act.
Bithumb’s Controversial Fee Hike Sparks Regulatory Action
Bithumb’s decision to raise its usage fee rate from 2.2% to 4.0% per annum on July 23 has instigated regulatory action. Despite Bithumb later retracting this proposal, it has brought substantial regulatory attention. The FSS cited Article 5 of the Virtual Asset Industry Supervision Regulations, which insists that deposit fees should be reasonably calculated based on operational income and expenses.
Broader Regulatory Landscape and Future Implications
Beyond the fee hikes, the FSS is working on a broader regulatory framework that includes a new monitoring system to detect unusual trading activities. This initiative requires exchanges to submit detailed data and comply with new stringent standards. The Digital Asset Exchange Alliance (DAXA) is also reviewing over 1,300 digital assets to ensure adherence to the latest regulations, potentially posing challenges for some altcoins.
Conclusion
With the FSS stepping up its regulatory efforts, South Korea’s crypto market is on the cusp of significant transformations. These actions underscore a commitment to fair competition and user protection, with an emphasis on transparency and compliance. Stakeholders in the crypto space should brace for tighter oversight and continuously evolving regulatory requirements.
