In South Korea, due to the lack of clear cryptocurrency regulations, those exchanges lose international customers. Instead, they focus more on users from the local community.
A spokesman for the South Korean stock exchange Upbit expressed his concern over their platform, which had a problem with providing consumers with fiat money.
“Supplying fiat money through authenticated bank accounts was a key issue for us because we couldn’t provide this service for over two years.”
– Spokesman for the South American stock exchange Upbit said.
To partially solve this problem, on June 23, the Upbit Exchange established an agreement with the online bank K Bank. This allowed the restoration of fiduciary money flow among Korean website customers.
However, regulations in South Korea only allow citizens of their country to open an online bank account. This means that foreign customers cannot use this function.
By establishing cooperation with K Bank, Upbit broke off relations with the Industrial Bank of Korea, which means that foreign users must withdraw their funds from the stock exchange before July 24.
“Ensuring full compliance with the regulations is of course very important to us, therefore the fact that non-South Korean citizens cannot use our services through K Bank was not a decisive factor in concluding the agreement.”
Said a spokesman for Upbit.
Other Korean stock exchanges, such as Korbit and Coinone, introduced the obligation to have a Korean mobile number, which automatically excluded foreign customers from both exchanges.
Preparation for 20% tax
From June, Upbit collects 22% tax on every withdrawal of funds belonging to a foreign client. This is to provide financial security for the company until the state introduces new tax regulations.
Legislators proposed a tax of 20%, but there was no official statement from the Ministry of Economy and Finance of South Korea. It is hard to assess how much the change will affect stock exchanges such as Upbit. In the event that the amount of tax imposed by the government is lower than expected, the exchange will make appropriate refunds.