South Korea: Bank group warns exchanges over altcoins as traders snub Bitcoin
South Korean banks have been told to watch the number of altcoins on crypto exchanges to ensure they adhere to new anti-money laundering (AML) laws.
The Korea Federation of Banks (KFB) recently warned crypto exchanges that handling too many smaller cryptocurrencies exposes them to greater risk, reports The Korea Herald.
The KFB is responding to government guidelines that came into effect in March, which mean banks:
- Bear greater responsibility for screening crypto exchanges for “financial soundness.”
- Hold culpability for illegal activity is discovered on crypto exchanges.
- Remain liable to fines if illegal crypto activity goes undetected.
As a result, KFB is urging banks to count how many non-Bitcoin cryptocurrencies trade on crypto exchanges they support.
This will reportedly allow banks to determine crypto exchange trading capacity and health.
South Korea’s new AML measures have so far proven unpopular, and as reported by the Korea JoonAng Daily could force one hundred smaller crypto exchanges to close.
South Korea piles into altcoins
Still, the KFB’s directives coincide with booming altcoin trade volumes in South Korea.
Bitcoin trade across the country’s top four exchanges dropped between 30% and 40% in April, with a raft of smaller cryptocurrencies topping volume charts instead.
The Korea Herald noted altcoins made up around 95% of trade on local crypto exchanges at the time of KFB’s warning.
But perhaps the most startling statistics relate to South Korea’s crypto trading in comparison to the nation’s stock market.
[Read more: 100 South Korean crypto exchanges could close in six months, report]
Indeed, South Korea’s crypto markets reportedly processed more activity than its stock market for the first time in history last month, peaking at $21.5 billion daily trades.
Local media noted that local markets KOSDAQ and KOSPI together saw about $17 billion for the month.
Update 19:18 UTC, May 10: Adjusted figures in the final paragraphs.