An electronic signboard at the cryptocurrency exchange Bithumb in Seoul on April 20, 2021. (Yonhap)
SEOUL, June 2 (Korea Bizwire) — Smaller cryptocurrency exchanges are scrambling to kick out so-called altcoins as a new amendment bill for reporting and using specified financial transaction information is soon to take effect.
By September, all cryptocurrency exchanges must offer Information Security Management System (ISMS) authorization and bank account connections to stay in business.
Industry sources say that some 20 exchanges that received ISMS authorization so far have discontinued more than 200 kinds of altcoins.
Probit, for instance, deleted 178 altcoins flagged with investment warnings on Tuesday.
Altcoins are hazardous due to low exchange volume, and can easily be subjected to price manipulation.
South Korea’s four largest exchanges already list far more altcoins than foreign exchanges.
Smaller exchanges are obsessed with doing away with altcoins because they may hinder their efforts to coordinate bank account connections.
Banks work as a primary review board for these exchanges before they are reviewed by the state-run Financial Intelligence Unit (FIU).
Many banks are reluctant to join hands with exchanges other than the top four — Bithumb, Upbit, Corbit and Coinone — since it may risk tainting their impressions on financial authorities.
“We’ll have to be ready by June or July at the latest to fit in the time needed for the FIU review,” an official at a smaller exchange said.
H. M. Kang (hmkang@koreabizwire.com)