September 25 is the doomsday for most cryptocurrency exchanges in South Korea, as the revision to the Act on Specific Financial Transaction Information 특정금융거래정보법 takes effect. The revision mandates crypto exchanges to be registered after implementing rigorous anti-money laundering (AML) and know-your-customer (KYC) requirements; unregistered exchanges will be shuttered.
Because of the cost and complexity of the AML/KYC requirements, most exchanges - which are relatively small operations - will not be able to meet the requirements. Even the large international exchanges, such as Binance of China and Bitfront of the United States, chose to cease operations in Korea rather than complying with the regulations. Within Korea, only the four largest domestic exchanges - Bithumb 빗썸, CoinOne 코인원, KorBit 코빗 and Upbit 업비트 - are expected to be able to follow the new legal requirements.
On August 21, Upbit filed its application for registration with the Financial Intelligence Unit 금융정보원, becoming the first crypto exchange to begin taking steps for registration. The FIU will make a determination within 90 days.
