Would Regulation Impact South Korea’s Dominance In Crypto Trading?

One of the world’s most wired societies, South Korea is betting big on the cryptocurrency boom. The country is also home to 3 of the top 15 global digital-currency exchanges (by volume), namely, Bithumb, Coinone, and Coinnest. So, over 20% of global cryptocurrency trading volume happens through South Korean exchanges.

Currently, South Korea is the world’s No. 3 market in Bitcoin (BTC) trading, after the US and Japan. It also accounts for the highest trading volume for 2 of the top 5 cryptocurrencies. It is the largest exchange market for Bitcoin Cash (BCH) and Ripple (XRP), accounting for over 26% and 38% of their global trading volumes, respectively.

Here are some statistics (source: coinmarketcap.com) as of 1:47 AM Monday, 18 December 2017 (GMT-5) for the top markets for Bitcoin Cash and Ripple.

Self-Regulation Kicks In
South Korea’s unprecedented rise and participating in the crypto space has been raising regulators’ eyebrows. Consequently, on Thursday December 14th, the South Korean government released “emergency measures” for cryptocurrency regulation. Accordingly, South Korean cryptocurrency exchanges must now adhere to requirements such as:

-Keeping customers’ funds separate
-Providing users with thorough explanations of investment risks
-Confirming users’ real names
-Establishing an adequate anti-money laundering system
-Having an asset protection system such as the dispersion of cryptographic keys
-Increasing transparency by disclosing transaction details to the public

While the impact of these new rules on cryptocurrency trading volumes on Korean exchanges is yet to be seen, South Korea currently dominates the crypto space, after the US.