According to the announcement, some publications mentioned that a new wave of capital is believed to come into existence in the cryptocurrency market, seen that digital exchanges were necessarily placed on hold after the government revealed its purpose to officially legitimize the overall market and regulate digital trading platforms similar to the financial institution’s regulations.
All Crypto Exchanges in South Korea Meet New Requirements, New Money to Come inhttps://t.co/CupOMcujbA
— 𝗕𝗮𝗻𝗸 𝑿𝑹𝑷 (@BankXRP) July 14, 2018
12 Cryptocurrency Exchanges Pass Security Checks
Korea Blockchain Association arranged a press conference on Wednesday to announce the outcome of its inspection carried on the cryptocurrency exchanges. The Association “gave a nod to the cybersecurity standards of 12 cryptocurrency exchanges,” the Korea Herald reported.
The KBA has been promptly assisting self-regulation since last year. There were 23 crypto exchanges out of which 14 of them voluntarily accepted the inspection. Following the news outlet:
Exchanges that gained self-regulatory affirmation were 12 out of 14: Dexko, Hanbitco, Okcoin Korea, Huobi Korea, Bithumb, Upbit, Neoframe, Gopax, Cpdax, Coinzest, Korbit and Coinone. Operators of the other two — Sunny7 and Komid — withdrew from the KBA-led inspection.
The inspection was placed “through interviews by third-party experts authorized by KBA in June and July,” the publication reported, highlighting that a “hacking simulation on the exchanges did not take place.”
Nevertheless, the institution mentioned that the 12 exchanges satisfy the “general standards” such as “minimum total assets, adoption of a cold wallet, anti-money laundering requirements and dozens more.” They also fulfilled “the criteria for cybersecurity standards, which the association referred to as minimum requirements.”
Investors Seem Unhappy
In South Korea, due to some of controversial decision to accept “Bithumb”, many investors gave the negative response to the otherwise announcement made by the Association.
In June, Bithumb- the Korean largest digital exchange faced the hack of around $40 million – $16 million of which was said to be recovered.
As the exchange defused its withdrawals and deposits instantly after the security breach for nearly a month, without any signs of beginning the deposits and withdrawals in the near future; some of the investors have started losing trust in Bithumb, which has been the trusted leading exchange from many years.
In June the press conference was conducted by the Financial Services Commission chairman- Kim Yong-bum announced:
“The government’s practical policies led the ‘Kimchi Premium’ to disappear in South Korea. At its peak, the ‘Kimchi Premium” in the local cryptocurrency exchange market reached 50 percent….. As of current, the price of cryptocurrencies is nearly identical to other markets, demonstrating stability ….”
Some of Bithumb user’s comments on the mainstream news publication & online communities were:
“Bithumb, the exchange that has been single-handedly reviving the Kimchi Premium, is passed? Not so sure about this,” one investor said. “Get rid of Bithumb. The exchange created Kimchi Premium again and if the value of cryptocurrencies drops on Bithumb. It could have a negative impact on the global market,” another user added.
The Decision Seems Overall Positive
During a press conference conducted in Seoul on Wednesday, the head of the KBA’s inspection committee, Jhun Ha-Jin, emphasized that approval does not promise exchanges’ immunity, saying:
“This inspection does not guarantee the absolute safety of the 12 exchanges. The result indicates the 12 exchanges satisfy the minimum requirement for their operations. It is like a driver’s license. It is hard to tell whether they are good drivers or not.”
This ambiguous statement from the KBA has criticized the Korean industry. Since an acceptance of a self-regulatory body proves assurances to the blockchain developers and cryptocurrency investors. However, who might end up cutting loose because of the regulatory negligence.
The KBA solely deemed the security systems of exchanges that are currently in place, despite their business operations and practices.
With this release, the Korean government is tightening their regulations. Mostly focusing on the blockchain sector and the local digital exchange market as well. This step is facilitating the overall growth of emerging companies and startups working to advance the cryptocurrency space.
Image Source: South Korea