South Korea’s Financial Services Commission has moved to ban cross-trading on crypto exchanges in the country. Several exchanges in South Korea have stated to be against the ban, explaining that it will further disrupt the cryptocurrency trading environment in South Korea.
South Korean exchanges are protesting against the ban
Cross trading, an illegal practice in many jurisdictions, involves offsetting buy and sell orders for the same asset (at the same price) without recording the transaction on the order book.
In South Korea, cryptocurrency exchanges are protesting against the Financial Services Commission their decision. They are not agreeing on the decision to ban “ban on cross-trading by business operators.” This is because due to the ban on cross-trading, the fee received in cryptocurrency cannot be converted into KRW. In addition, exchanges point out that it will be difficult to pay taxes on commissions if they cannot secure KRW. This would also mean that the proposed ban could eliminate revenue that would have been generated through trading fees.
South Korean crypto exchanges will be forced to create a new company to convert trading fees into fiat currency. However, such a move would come at a significant cost, as the country’s Anti-Money Laundering policies would make such a company expensive to operate.
The FSC sees it as a conflict of interest issue
The FSC, on the other hand, is still in a tough stance. An official of the Financial Services Commission said, “Regardless of the reason, cross-trading on exchanges is a conflict of interest issue.” He added, “Whether you want to change the cryptocurrency to another asset (other than won) or keep the cryptocurrency, you need to find a solution yourself. “He said.
Last week the FSC announced they had a meeting with several exchanges in Korea, and it is very likely that it was one of the plans that have come out of this meeting.