The main regulatory agency of South Korea has recently reported that it is planning to restrict employees of crypto exchanges from trading on the platform they work for.
The Korea Financial Services Commission, FSC, which is the main financial regulator of the country, has announced that the fine for breaking the law will be 100 million won, which is almost $90,000. Currently, the country does not have any laws in this regard.
The regulatory agency has already met with the representatives of the leading crypto exchanges in the country and informed them about the updates in the regulatory framework. In addition to the restriction noted above, the country is also adopting new requirements for crypto exchanges.
New requirements for crypto exchanges in South Korea
As the Financial Services Commission of South Korea reported, they have also updated the Financial Transactions Reports Act. According to the changes made in the act, all crypto exchanges in the country are now required to register with the Korea Financial Intelligence Unit and the deadline for the registration is September 24, 2021.
However, it should also be noted that the registration process is not that simple as companies are required to provide the regulatory agency with detailed data about their services.
Among many other requirements, the new crypto trading rules in the country require the crypto exchanges to adopt anti-money laundering policies and strictly follow the Know Your Customer (KYC) policy.
The regulatory agency has also reported that if a company fails to provide necessary information to the agency and is not approved by the deadline, its services will be shut down.
The Korean Financial Intelligence Unit also reported that if employees of the crypto exchanges are caught trading on their platforms after the deadline the license of the exchanges will be revoked.
Although the country did not have any restrictions in this regard before, there are many exchanges in South Korea that have already established this policy. Any other companies that did not have such laws will be required to follow the new regulatory framework of the country in order to remain in the market.
How did crypto exchanges handle employee trading before?
As already mentioned, the country did not have any specific regulations or requirements for crypto exchanges regarding employee trading before. However, some of the leading crypto exchanges in the country had their own guidelines in this regard.
For example, one of the leading players in the local market, Upbit, allows its employees to trade on their own platform, but there are some restrictions. For example, the employees of Upbit are only able to trade large cryptocurrencies, such as Bitcoin and Ether for example. Other coins are out of question.
But this is not all, the crypto exchange also requires its employees to report the amount of crypto they own as well as the amount of profit they make. Another extremely popular crypto exchange in the Korean market, Bithumb, allows its employees to trade, however, not during work hours. In addition, the employees are required to sign a special document saying that they will not use any information from the company for personal gains.
Crypto trading in South Korea
Over the past few years, crypto trading has become increasingly popular in the country. There are numerous exchanges that offer traders access to leading cryptos around the world.
Thanks to the modern crypto exchanges, the market is becoming more accessible for everyone in the country. Investing in crypto has become a lot easier for everyone, even for those who have little to no experience in trading.
Among the main reasons for this might be the increasing popularity of crypto trading bots. These bots are giving traders the ability to analyze the market in just a few seconds, open and close orders, and find the best opportunities in the market.
The importance of crypto trading bots is especially significant in a country like South Korea. Most of the crypto traders and enthusiasts in the country are from the younger generation and due to the general work culture and ethics, these people have hardly any time to sit in front of their screens and analyze the market for hours.
The majority of the younger generation in the country are students, which means that they spend most of their time studying. Those interested in crypto trading regularly use crypto bots to make things easier.
In fact, there are numerous software companies that have created their own crypto trading bots. For example, one of them is Bitsgap.com, which is capable of connecting with leading crypto exchanges globally. Auto trading bots such as Bitsgap give traders the ability to handle all their cryptos in one place.
Why were the new laws adopted?
The main aim of adopting the new regulations in the country is to make crypto trading in South Korea more accessible as well as more fair for every participant. The new rules will ensure that no trader has an advantage over others.
According to the regulatory body of the country, If the new rules are implemented, the employees of crypto exchanges will not be able to trade on the platform they work for. These people will still have the ability to trade crypto, however, they will be required to use exchanges that they do not work for.
Crypto trading is exceedingly popular in the country, it has become even more popular after the crypto price boom of 2021.