- The Korea Fair Trade Commission (KFTC) plans to bring Upbit’s holding organization under large enterprises.
- Firms with over 5 Trillion Won assets come under the sight of KFTC.
- The regulator might further include the operator of the largest crypto exchange in the country as a large non-financial business.
The Korea Fair Trade Commission (KFTC) is contemplating bringing the entity behind South Korea’s largest exchange under large business regulations.
A Massive Growth Last Year Brought The Operator Under Limelight
The authority is supposedly all set to impose tougher regulations on Dunamu, which is the holding company behind Upbit, the most prominent crypto exchange in South Korea, by classifying it as a Large enterprise.
KFTC sees firms with over 5 Trillion won, which is $4.03 Billion in assets, subject to stricter regulatory scrutiny. And further asks for information on board decisions, intracompany dealings, and shareholders under the Monopoly Regulation and Fair Trade Act.
Dunamu had a holding of 10.15 Trillion won in assets last year. The company was just slightly above the 10 Trillion margins that exempt businesses from being classified as “companies subject to limitations on mutual investment.”
Apart from being prohibited from conducting mutual investment, the firm would also face other restrictions like debt guarantees, cross-shareholdings, etc. The entity attracted the eyes of Korean regulators as it grew last year at a pretty fast pace. Ironically, it held just 1.38 Trillion won of assets under management as of 2020.
As reported by Korea Herald, The regulator is prone to regulate Dunamu as a non-financial business and look at the customer deposits of Upbit as its assets. And if this happens, Upbit might witness strict regulations because of the massive size of its managed assets.
Similar to some other politicians, South Korea’s president-elect Yoon Suk-yeol openly showed his inclination toward cryptocurrencies. During a campaign, he cited that the ones generating profits less than $40,000 annually, from crypto trading would be excused from paying taxes.
The country has been carrying out regulatory changes to execute anti-money laundering and counter-terrorist financing safeguard in the crypto space under the Moon Jae-in administration.
And apparently, banks and non-crypto companies are also entering the industry. And these new players in the space may increase the competition in South Korea’s crypto scene.
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Source: https://www.thecoinrepublic.com/2022/04/21/south-koreas-prominent-crypto-exchange-may-face-painstaking-regulations/