South Korean crypto exchanges have reached the deadline set by the government to comply with the so-called Travel Rulebut not all industry players are satisfied with the move.
Starting Friday, Korean exchanges will flag cryptocurrency transfers above $821. Transfers above that value will be restricted to user-verified walletsand a select number of exchanges will adopt its anti-money laundering (AML) system.
The Travel Rule is a set of guidelines issued by the Financial Action Task Force (FATF) designed to help authorities track the movement of virtual assets between Virtual Asset Service Providers (VASPs).such as cryptocurrency exchanges or issuers of digital assets.
A source of a local centralized exchange today hailed the regulatory move as a step forward for the country’s crypto industrytelling Cointelegraph that:
“The industry is now moving towards institutional acceptance and will work harder for mass adoption.”
There may be a problem for South Korean traders who amassed a market value of $45.9 billion worth of crypto in 2021, that they need to figure out which exchanges they can transfer funds to and from. Among the four big exchanges Upbit, Bithumb, Coinone and Korbit, there are two Travel Rule systems. Each system works slightly differently and requires international exchanges to follow their guidelines.. If those guidelines are not followed, transfers will not be allowed.
According to the CEO of South Korea-based cryptocurrency venture capital firm Hashed Simon Kim, these differences are likely to cause confusion and frustration among national traders. Consider that the Korean cryptocurrency community sees the mandate as “clear overregulation”as highlighted to Cointelegraph that:
“In a state where the infrastructure was not ready, a regulatory body with little understanding was forced to push through. Reviews are expected to continue at an appropriate level with criticism from the Korean community.”
The cryptocurrency wallet and Web3 Hashed includes blockchain ecosystems Klaytn and Ethereum, NFT game Axie Infinity, and decentralized exchange dYdX.
Upbit is the largest exchange in the country, with more than 78.3% of the exchange market shareaccording to local analyst Jun Hyuk Ahn. Ha adopted your homegrown Verify VASP program. Starting Friday, Upbit allows transfers to and from its affiliates in Singapore, Indonesia and Thailand, Bblock, GOPAX, Cashierest, Flat Thai Exchange, Aphrobit, Binance, Bybit, Okcoin, Crypto.com, Coinbase, BITFRONT, Bittrex, Bitbank , Gate.io, Kraken, BitMEX, FTX US and Haru Invest.
For its part, Bithumb, Korbit and Coinone have adopted the CODE system. This allows transfers between Coinbase, Kraken, Coincheck, bitFlyer, Bybit, Gemini, Coinlist Pro, Phemex, Bitbank, Line bitmax, Bitfront, FTX, and Binance.
Domestic transfers are blocked until April 8.
The rules may affect decentralized finance (DeFi) traders the most as they rely on personal wallets for trading. Among all exchanges, transfers to or from private wallets will not be allowed unless the user verifies the address in person.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.