As a seasoned crypto investor with roots deeply entrenched in the dynamic world of digital assets, I find myself both excited and cautious about the recent regulatory developments in South Korea. The introduction of supervisory fees for exchanges like Upbit and Bithumb is, undeniably, a step towards maturing this industry, bringing it closer to traditional financial institutions.
In simple terms, starting from next year, cryptocurrency exchanges such as Upbit and Bithumb in South Korea will have to pay new supervisory fees. These regulations were set by the Financial Services Commission and are part of recent updates to the ‘Enforcement Decree of the Act on the Establishment of the Financial Services Commission’ and the ‘Regulations on the Collection of Financial Institution Contributions’.
Under the latest regulations, operators of virtual assets are required to cover supervisory fees for inspections by the Financial Services Commission (FSS). The estimated total fee for the leading four platforms is approximately 300 million Korean won (around $220,000 USD). Out of this sum, Upbit – the largest exchange – is projected to contribute more than 90%, equating to around 272 million Korean won ($199,592 USD).
Bithumb plans to pay approximately 21.14 million Korean won (equivalent to about $155,157 USD). In contrast, Coinone and GOPAX will contribute smaller amounts: around 6.03 million KRW ($4,422) by Coinone and 830,000 KRW ($608) from GOPAX. Korbit is not included in these fees because its revenue is lower compared to the other exchanges mentioned.
1. These charges function somewhat like a tax for financial institutions undergoing FSS inspections, and they are compulsory for businesses earning 3 billion won or more annually. This new system moves at an unprecedented pace in comparison to other industries, reflecting the rapid expansion of the cryptocurrency market and increasing regulatory attention.
New Law Mandates 80% of Crypto Assets in Cold Wallets in South Korea
As a researcher, I was taken aback by the brief duration of the implementation phase, as I had anticipated a more extended timespan. For major platforms such as Upbit and Bithumb, these costs might be manageable, but for financially strained exchanges like Coinone and GOPAX, they could potentially introduce extra hurdles. Notably, this fee imposition coincides with South Korean exchanges experiencing a 30% decrease in trading volumes, which could further complicate matters.
Under this new regulation, digital asset exchanges are obligated to keep at least 80% of their users’ holdings in cold storage solutions, ensuring these assets remain separate from the company’s funds. Furthermore, they must verify the legitimacy of listed assets and adhere to current standards; otherwise, those assets may be removed (delisted).
As a seasoned investor with over two decades of experience in the crypto market, I have seen numerous regulatory changes and uncertainties that impact my investments. The delay in implementing a 20% gains tax by South Korea’s Ministry of Economy and Finance is just another example of such unpredictability. While I understand the need for regulations to ensure fairness and stability, it’s frustrating when these changes come with so much uncertainty and are implemented years down the line. In my personal experience, this kind of delay can lead to market volatility and make it difficult to plan long-term investment strategies. I hope that the government will provide clear guidance on the timeline for implementation to help us navigate the market more effectively.
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2024-08-04 01:44