Small South Korean Exchanges Fear Shut Down amid Crypto Sell-Off

Small cryptocurrency exchanges in South Korea have expressed their fears of closing down amid the ongoing strong crypto sell-off across the board. According to The Korea Times, a total of 26 crypto exchanges, including Upbit, Bithumb, Coinone, Korbit and Gopax, are in operation in the country.

This year, even major exchanges have seen a decline in transaction volume. In the second quarter of this year, the combined crypto transactions of the five exchanges was around $260 billion, which is down by more than 77% from last year.

In March, the US Federal Reserve began its aggressive rate hikes, which led to poor performance for the asset market.

“The four major exchanges, excluding Upbit, are struggling to expand their market shares, but the reality looks tough at a time when the market has lost momentum for a robust rally for the time being. For minor exchanges that cannot operate Korean-won-based crypto transaction services here, it will be much tougher to achieve sustainable growth,” an industry source told The Korea Times.

The outlook remains murky whether crypto market investor sentiment will remain buoyant in the coming months as most monetary authorities, including the Bank of Korea, are expected to maintain their hawkish stance. In addition, The Korea Times noted that a de facto monopoly held by the market leader, Upbit, makes it difficult for small exchanges to join the ranks of major exchanges.

In other news across the South Korean crypto sphere, in response to recent updates to Litecoin (LTC), Bithumb and Upbit, two major South Korean cryptocurrency exchanges, have issued warnings.

A policy in South Korea requiring crypto exchanges to conduct know-your-customer (KYC) and anti-money laundering (AML) procedures was cited by both exchanges. As a result, South Korean exchanges may delist products following these warnings.