In one of its latest reports, BusinessKorea, a reputable Korean online business portal established more than 30 years ago, revealed a shocking truth about the present condition of nearly all cryptocurrency exchanges that currently operate in this jurisdiction. The report claims that the mind-blowing 97% of all South Korean exchanges are balancing on the edge of bankruptcy.
After having carried out an all-encompassing assessment of the state of affairs of all major cryptocurrency exchanges in the country, the reporters arrived at a rather frustrating conclusion that only 3% of these entities showcase the satisfactory financial health. The rest are approaching the bankruptcy abyss from which there is practically no way back, especially in this young yet extremely competitive market.
Furthermore, the overall ranking of all South Korean crypto exchanges leave much to be desired as the likes of Upbit, probably the most popular one, found itself placed at the 45th spot of CoinMarketCap’s Top 100 crypto exchanges by adjusted trading volume. The rankings by reported volume push Upbit even lower to the 58th position.
Whilst the bigger exchanges manage to keep their heads above the water, for the time being, the smaller ones are already one step away from falling into oblivion. Just several days ago, a newly emerged crypto exchange PrixBit, which had already launched a beta version and carried out the sale of PRX tokens, announced that due to “financial difficulties” the founders decided to shut down the platform and refund all deposits.
Allegedly, one of the primary reasons behind this situation constitutes in the ever-decreasing volume of transactions which, in its turn, stemmed from the fact that the growing number of blockchain startups that originate in South Korea prefer to list their newly issued token on foreign exchanges, thus driving the domestic trading volume into the ground.
Over the past few months alone, such projects as Sigma Chain, Ziktalk, and Payexpress have officially sought listing on BW.com, a crypto exchange domiciled in China and listed among the Top 20 platforms in the world. Other ones, like Medibloc and Temco, are also seeking foreign accommodations, despite being already listed on the domestic platforms. Apart from China, the exchanges based in the United States and Singapore are also considered as popular destinations for the sprouting blockchain projects.
Such a mass migration is explained by the fact that foreign exchanges began forming the market for the South Korean won in an attempt not only to broaden the scope of offered services but also to pouch the promising startups.
The toughening of regulations, especially the ones that concern anti-money laundering, only aggravates the situation. There are rumors swirling around that the Financial Intelligence Unit (FIU) of the main financial body of South Korea is hatching a plan to establish direct regulatory control over all crypto exchanges in the country. It remains to be seen whether these alarming tendencies would result in a complete deterioration of the crypto market of this prosperous Asian state.
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