Less than a year ago crypto exchange Binance entered the Korean market for the first time. However, as it turns out it was not easy to strengthen its positions in the market. Recently, Binance KR decided to shut down its operations in South Korea.
Interestingly, Binance KR attributed the move to declining liquidity and low trading volume of its BKRW trading pairs. As a reminder, BKRW is a stablecoin pegged 1:1 to the country’s currency used for crypto-to-crypto settlements on the platform.
The first step was to stop all new accounts from registering. As a result, from December 24 it is not possible to register an account. Moreover, Binance will halt trading services in less than one month, according to the plan. Moreover, the platform will stop operating before the end of January, and the delisting of all BKRW pairs also expected to happen on January 29. It is worth mentioning that, customers should liquidate their BKRW holdings under January 29 either for the stablecoin or other supported cryptocurrencies.
Binance in South Korea
As mentioned above, the crypto exchange Binance entered the local market less than a year ago. The crypto exchange acquired fintech firm BxB. Interestingly, that firm created KRWB, a stablecoin backed by the South Korean Won. As a reminder, Binance KR opened for registration and deposits on April 2.
It is worth noting that, Binance KR reported shrinking liquidity as a reason for trading in Won-backed trading pairs. Importantly, stricter regulations compelled blockchain outfits to pursue token listings on overseas exchanges further exacerbating the trading volume problem in the country. Hopefully, this year South Korea legalized cryptocurrency trading while stipulating rigid compliance to real-name trading accounts.
This spring, the country’s parliament passed a revised bill on the reporting and use of special financial transaction information, focusing on the introduction of a permit system for cryptocurrency exchanges.
Importantly, the Financial Supervisory Service and Financial Intelligence Unit which is part of the Financial Services Commission will also strengthen the Anti-Money Laundering (AML) System for virtual assets such as cryptocurrency in compliance with the recommendations by the Financial Action Task Force ahead of the law’s implementation. The bill will be implemented from March 2021.
South Korea has potential when it comes to cryptocurrencies. Unfortunately, Binance KR decided to close its operations. However, there are other cryptocurrency exchanges in the country as well.